<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 033-72810
UNIVERSAL OUTDOOR, INC.
ILLINOIS 36-2827496
------------------------------ --------------------------------
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO, ILLINOIS 60606
REGISTRANT'S TELEPHONE NUMBER: (312) 431-0822
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
_____ _____
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK, $0.01
PAR VALUE, AS OF AUGUST 6, 1997 WAS 10,000 SHARES.
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Part I. Financial Information
Item 1. Financial Statements
UNIVERSAL OUTDOOR, INC.
(a wholly owned subsidiary of Universal Outdoor Holdings, Inc.)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands)
June 30, December 31,
1997 1996
----------- ------------
ASSETS
Current assets:
Cash and equivalents $ 2,168 $ 11,631
Cash held in escrow - 9,455
Accounts receivable, less allowance
for doubtful accounts of $1,625 and $2,849 31,884 20,927
Accounts receivable - Parent - 2,708
Other receivables 2,218 1,445
Prepaid land leases 8,005 4,010
Prepaid insurance and other 4,898 4,173
-------- --------
Total current assets 49,173 54,349
Property and equipment, net 542,768 382,555
Goodwill and intangible assets, net 242,670 219,009
Other assets, net 19,078 25,114
-------- --------
Total assets $853,689 $681,027
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 3,387 $ 3,373
Accounts payable - Parent 99 -
Accrued expenses 29,067 26,544
-------- --------
Total current liabilities 32,553 29,917
-------- --------
Long-term debt and other obligations 509,116 347,941
Other long-term liabilities 485 485
Long-term deferred income tax liabilities 79,563 71,700
Commitments and contingencies - -
Stockholder's equity:
Common stock, $.01 par value, 1,000,000
shares authorized; 10,000 shares issued
and outstanding - -
Additional paid in capital 274,821 274,821
Accumulated deficit (42,849) (43,837)
-------- --------
Total stockholder's equity 231,972 230,984
-------- --------
Total liabilities and stockholder's equity $853,689 $681,027
======== ========
See accompanying notes to consolidated financial statements.
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UNIVERSAL OUTDOOR, INC.
(a wholly owned subsidiary of Universal Outdoor Holdings, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $58,602 $20,035 $106,177 $29,366
Less agency commissions 5,497 2,223 9,064 3,127
------- ------- -------- -------
Net revenues 53,105 17,812 97,113 26,239
------- ------- -------- -------
Operating expenses:
Direct cost of revenues 19,659 5,949 38,104 9,520
General and administrative
expenses 5,148 1,922 9,549 3,076
Depreciation and amortization 14,229 2,642 27,088 4,674
------- ------- -------- -------
39,036 10,513 74,741 17,270
------- ------- -------- -------
Operating income 14,069 7,299 22,372 8,969
Other (income) expense:
Interest expense 10,473 3,562 20,933 5,871
Interest expense - amortization
of deferred financing costs 720 108 965 215
Other, net (332) 1,663 (514) 1,674
------- ------- -------- -------
Total other expense 10,861 5,333 21,384 7,760
------- ------- -------- -------
Net income $ 3,208 $ 1,966 $ 988 $ 1,209
======= ======= ======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
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UNIVERSAL OUTDOOR, INC.
(a wholly owned subsidiary of Universal Outdoor Holdings, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in thousands)
For six months ended
1997 1996
---- ----
Cash flows from operating activities:
Net income $ 988 $ 1,209
Depreciation and amortization 27,088 3,681
Amortization of deferred financing costs 965 215
Costs related to acquisitions - 1,750
Loss on sale of property and equipment - -
Changes in assets and liabilities, net of effects
from acquisitions:
Accounts receivable and other receivables (10,602) (1,254)
Prepaid land leases, insurance and other (3,827) (209)
Accounts payable and accrued expense (8,278) 866
Accrued interest and other 1,413 (72)
Accounts payable - Parent (31) (10)
--------- -------
Net cash from operating activities 7,716 6,176
--------- -------
Cash flows used in investing activities:
Capital expenditures (8,631) (2,943)
Payments for acquisitions, net of cash acquired (177,287) (107,106)
Acquisition costs - (74)
Other payments - (2)
--------- -------
Net cash used in investing activities (185,918) (110,125)
--------- ---------
Cash flows from (used in) financing activities:
Proceeds from issuance of long term debt - 75,000
Long-term debt repayments (903) (1,173)
Deferred financing costs (1,113) -
Net borrowings under credit agreements 161,300 222
Additional paid in capital - 30,000
Other - (60)
--------- -------
Net cash from financing activities 159,284 103,989
--------- --------
Net increase (decrease) in cash and equivalents (18,918) 40
Cash and equivalents, at beginning of period 21,086 19
--------- -------
Cash and equivalents, at end of period $ 2,168 $ 59
========== =========
Supplemental cash flow information:
Interest paid during the period $ 19,178 $ 5,815
========== =========
See accompanying notes to consolidated financial statements.
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UNIVERSAL OUTDOOR, INC.
(a wholly owned subsidiary of Universal Outdoor Holdings, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1 - BASIS OF PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS:
The interim financial statements contained herein have been prepared by
management and are unaudited. The financial statements should be read in
conjunction with the financial statements and the notes thereto included in
the Annual Report on Form 10-K of Universal Outdoor, Inc. ("Universal") for
the year ended December 31, 1996.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which were of a normal recurring nature, necessary
to present fairly the financial position of Universal as of June 30, 1997,
and the results of its operations and its cash flows for the periods
presented herein.
Earnings per share calculations have not been presented because Universal is
a wholly-owned subsidiary of Universal Outdoor Holdings, Inc. (the "Holding
Company").
NOTE 2 - CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT):
<TABLE>
<CAPTION>
Total
Additional Stockholder's
Shares of Paid In Accumulated Equity
Common Stock Capital Deficit (Deficit)
------------ ---------- ----------- -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1996 10,000 $274,821 $(43,837) $230,984
Net income for the six months
ended June 30, 1997 - - 988 988
-------- -------- -------- --------
Balance at June 30, 1997 10,000 $274,821 $(42,849) $231,972
======== ======== ========= ========
</TABLE>
NOTE 3 - ACQUISITIONS:
In January 1997, Universal acquired a total of approximately 2,018
advertising display faces located in and around Memphis, Tennessee. The
purchase price was approximately $71 million plus 100,000 shares of common
stock of the Holding Company issued on January 2, 1997 at market value.
In January 1997, Universal acquired a total of approximately 1,035
advertising display faces located in three markets in the east coast of the
United States, including Metro New York, Northern New Jersey
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and Hudson Valley, for approximately $40 million in cash.
In February 1997, Universal acquired a total of approximately 135 advertising
display faces located in and around Evansville, Indiana for approximately
$5.5 million in cash. Universal also acquired 12 existing advertising
display faces and 35 in process display faces in New Jersey for approximately
$5.3 million in cash.
In March 1997, Universal acquired a total of approximately 600 transit
advertising panels in and around Memphis, Tennessee for approximately $8.5
million in cash.
In March 1997, Universal acquired $600,000 of outdoor advertising properties
in Florida in exchange for 20,000 shares of the Holding Company's stock.
In April 1997, Universal entered into an agreement to purchase 90 advertising
display faces in and around New York, New York for approximately
$51.0 million in cash. The deal was consummated in July 1997.
In June 1997, Universal acquired approximately 1,450 advertising display
faces in the Baltimore metropolitan area for $46.5 million in cash.
All completed acquisitions have been accounted for under the purchase method
of accounting and accordingly, the operating results of the acquired
businesses are included in Universal's consolidated financial statements from
the respective dates of acquisition.
The following unaudited pro forma financial information includes the results
of operations of the 1996 and significant 1997 acquisitions, as noted in
Universal's Annual Report on Form 10-K and the notes included herein, as if
the transactions had been consummated as of the beginning of the period
presented after including the impact of certain adjustments such as
depreciation of advertising structures, amortization of goodwill and other
intangibles, reduction of corporate expenses relating to the elimination of
certain duplicate corporate expenses, principally relating to employee costs
and other corporate activities and interest expense on debt assumed to have
been incurred to complete the transactions.
For the Six Months Ended
1996 1997
---- ----
PRO FORMA PRO FORMA
--------- ---------
(unaudited) (unaudited)
Net revenues $89,649 $100,403
Depreciation and amortization 27,259 28,937
Operating income 15,821 22,213
Interest expense 24,094 23,874
Loss before income taxes ($ 8,273) ($1,661)
These unaudited pro forma results are not necessarily indicative of what
actually would have occurred if the acquisitions had been in effect for the
entire periods presented and are not intended to project future results.
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NOTE 4 - RELATED-PARTY TRANSACTIONS:
In June 1994, Universal's parent entity, the Holding Company, advanced
approximately $1.2 million to Universal in the form of an inter-company loan
which was a portion of the proceeds from the sale by the Holding Company of
its notes and warrants. Universal does not pay interest on this loan, and as
of June 30, 1997, $99,000 was outstanding.
NOTE 5 - COMMITMENTS AND CONTINGENCIES:
Universal, as the successor to Outdoor Advertising Holdings, Inc. and POA
Acquisition Company ("POA"), was a defendant in a case in the United States
District Court, Middle District of Florida. The plaintiffs alleged that POA,
among others, conspired to restrain trade and to monopolize the market for
leases for land on which outdoor advertising structures can be erected. The
case was settled in 1997 with no significant adverse financial effect.
Universal is subject to various other claims and routine litigation arising
in the ordinary course of business. Such litigation includes claims by
municipalities that certain outdoor advertising structures should be removed.
The ultimate outcome of current and future litigation cannot be presently
determined. Management believes the outcome of current litigation will not
have a significant impact on Universal.
NOTE 6 - INCOME TAXES:
In arriving at a determination not to provide income taxes, Universal
considered its past operating history as well as the effect of acquisitions
on its full year results, statutory restrictions on the use of operating
losses from acquisitions, available tax planning strategies and its
expectation of the level of timing of future taxable income.
NOTE 7 - SUBSEQUENT EVENTS:
In July 1997, Universal consummated the purchase of 91 boards in and around
New York, New York for approximately $51.0 million in cash. Additionally,
Universal purchased approximately 63 boards in and around Memphis, Tennessee
and Tunica, Mississippi for approximately $2.5 million in cash.
In August 1997, the Holding Company filed an offering of common stock of 1.3
million shares for approximately $45 million in proceeds to the Holding
Company.
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<PAGE>
Item 2. Management's Discussion and Analyses of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
Universal Outdoor, Inc. (the "Company") is a wholly-owned subsidiary of
Universal Outdoor Holdings, Inc. (the "Parent"). The Company and its
consolidated subsidiaries constitute the operating subsidiaries of the
Parent. As used herein, references to the "Company" include the consolidated
subsidiaries of the Company, unless the context otherwise requires.
This quarterly report contains forward-looking statements that involve
risks and uncertainties. When used in this quarterly report, the words
"anticipate," "believe," "estimate" and "expect" and similar expressions as
they relate to the Company and its management are intended to identify such
forward-looking statements. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or
implied by, such forward-looking statements. Factors that could effect such
results, performance or achievement are set forth in "Risk Factors" in
Post-Effective Amendment No.6 in the Parent's Registration Statement on Form S-1
(File No. 33-93852).
Net revenues increased 270.6% to $97.1 million during the first six
months of 1997 compared to $26.2 million in the corresponding 1996 period.
This increase was a result of inclusion of approximately $6.9 million of
revenues from the first three months of 1997 from the Minneapolis and
Jacksonville markets (the "Naegele Markets") which were acquired from NOA
Holding Company ("Naegele") in April 1996 (the "Naegele Acquisition").
Additionally, $25.0 million is attributable to markets acquired from Outdoor
Advertising Holdings, Inc. in October of 1996 (the "POA Acquisition"), and
$24.6 million is attributable to markets acquired from Revere Holding Corp.
in December 1996 ( the "Revere Acquisition"), Matthew Outdoor Advertising
Acquisition Co., L.P. in January 1997 (the "Matthew Acquisition") and the
Baltimore market acquired from Lamar Advertising Company in June 1997 (the
"Penn Acquisition"). Revenues from markets located in and around Memphis (TN)
and Tunica County (MS) which were acquired by the Company in January 1997
(the "Memphis/Tunica Acquisition") contributed $8.5 million. The remaining
$5.9 million or 22.5% increase in net revenues was a result of higher
advertising rates and occupancy levels on the Company's signboards and
inclusion for the full six months of signboard revenues from advertising
display faces in the Des Moines (IA) and Dallas (TX) markets which were
acquired in 1996 (the "Additional Acquisitions"). Overall net revenues from
tobacco advertising increased to $10.3 million in the first six months of
1997 compared to $3.4 million in the 1996 period. This increase was due
mainly to the inclusion of tobacco revenues from the acquired markets. As a
percentage of net revenues, tobacco advertising sales decreased to 10.6% in
the first six months of 1997 compared to 13.0% in the 1996 period.
The tobacco industry has recently engaged in negotiations to settle
litigation against such industry. The tobacco companies have reached a
proposed settlement that, upon the approval of Congress, will become final
and binding. Such proposed settlement would require a total ban of tobacco
advertising on outdoor billboards and signs. Any such ban may have a
material adverse effect on the Company's revenues at least in the immediate
period following the imposition of such ban while alternate sources of
advertising are secured. There can be no assurance that the Company will
immediately replace such advertising revenue currently attributed to the
tobacco industry in the event of a total ban of tobacco advertising on
outdoor billboards and signs. Furthermore, even in the event the advertising
ban does not take place, state and local governments, including state and
local governments in areas where the Company does business, have recently
proposed and some have enacted regulations restricting or banning outdoor
advertising of tobacco in certain jurisdictions.
Direct cost of revenues increased to $38.1 million in the first six
months of 1997 compared to $9.5 million in the 1996 period. The Naegele
Markets and the POA Acquisition
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<PAGE>
accounted for $2.9 million and $8.2 of the increase, respectively. The
Revere Acquisition, the Matthew Acquisition, the Penn Acquisition and the
Memphis/Tunica Acquisition accounted for $14.9 million. As a percentage of
net revenues, direct cost of revenues increased to 39.2% in the first six
months of 1997 compared to 36.3% in the 1996 period.
General and administrative expenses increased to $9.5 million in the
first six months of 1997 from $3.1 million in the 1996 period. As a
percentage of net revenues, general and administrative expenses decreased to
9.8% in the first six months of 1997 compared to 11.8% in the 1996 period.
This percentage decrease was due to the addition of the new markets' revenues
without a significant increase in staffing or other corporate overhead
expenses.
Depreciation and amortization expense increased to $27.1 million in the
first six months of 1997 compared to $4.7 million in the 1996 period. This
increase was due to significant increases in the fixed assets and goodwill as
a result of acquisitions.
Total interest expense increased to $21.9 million in the first six
months of 1997 compared to $6.1 million in the 1996 period. The increase
resulted from increased debt outstanding under the Company's revolving credit
facility which was incurred to finance the Revere, Matthew and Memphis/Tunica
Acquisitions and from the issuance by the Company of $225 million 9 3/4%
Senior Subordinated Notes due 2006 in October 1996 and $100 million 9 3/4%
Series B Subordinated Notes due 2006 in December 1996.
The foregoing factors contributed to the Company's $1.0 million net
income in the first six months of 1997 compared to income of $1.2 million in
the 1996 period.
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
Net revenues increased 198.3% to $53.1 million during the three months
ended June 1997 compared to $17.8 million in the corresponding 1996 period.
This increase was a result of inclusion of approximately $13.1 million
attributable to markets acquired from the POA Acquisition, and $14.4 million
is attributable to markets acquired from the Revere Acquisition, the Matthew
Acquisition and the Baltimore market acquired from the Penn Acquisition.
Revenues from the Memphis/Tunica Acquisition contributed $4.3 million. The
remaining $3.5 million or 19.7% increase in net revenues was a result of
higher advertising rates and occupancy levels on the Company's signboards and
inclusion for the full three months of signboard revenues from the Additional
Acquisitions. Overall net revenues from tobacco advertising increased to
$5.9 million in the three months ended June 1997 compared to $2.2 million in
the 1996 period. This increase was due mainly to the inclusion of tobacco
revenues from the acquired markets. As a percentage of net revenues, tobacco
advertising sales decreased to 11.1% in the three months ended June 1997
compared to 12.4% in the 1996 period.
Direct cost of revenues increased to $19.7 million in the three months
ended June 1997 compared to $5.9 million in the 1996 period. The POA
Acquisition accounted for $4.2 million of the increase. The Revere
Acquisition, the Matthew Acquisition, the Penn Acquisition and the
Memphis/Tunica Acquisition accounted for $7.9 million. As a percentage of
net revenues, direct
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cost of revenues increased to 37.1% in the three months ended June 1997
compared to 33.1% in the 1996 period.
General and administrative expenses increased to $5.1 million in the
three months ended June 1997 from $1.9 million in the 1996 period. As a
percentage of net revenues, general and administrative expenses decreased to
9.6% in the three months ended June 1997 compared to 10.7% in the 1996
period. This percentage decrease was due to the addition of the new markets'
revenues without a significant increase in staffing or other corporate
overhead expenses.
Depreciation and amortization expense increased to $14.2 million in the
three months ended June 1997 compared to $2.6 million in the 1996 period.
This increase was due to significant increases in the fixed assets and
goodwill as a result of the acquisitions.
Total interest expense increased to $11.2 million in the three months
ended June 1997 compared to $3.7 million in the 1996 period. The increase
resulted from increased debt outstanding under the Company's credit facility
which was incurred to finance the Revere, Matthew and Memphis/Tunica
Acquisitions and from the issuance by the Company of $225 million 9 3/4%
Senior Subordinated Notes due 2006 in October 1996 and $100 million 9 3/4%
Series B Subordinated Notes due 2006 in December 1996.
The foregoing factors contributed to the Company's $3.2 million net
income in the three months ended June 1997 compared to income of $2.0 million
in the 1996 period.
LIQUIDITY AND CAPITAL RESOURCES
In January 1997, the Company consummated the Memphis/Tunica Acquisition
and as a result acquired 2,018 advertising display faces located in and
around Memphis (TN) and Tunica County (MS) for a purchase price of
approximately $71 million plus 100,000 shares of the Parent's stock.
Additionally, in January 1997, the Company consummated the Matthew
Acquisition and as a result acquired approximately 1,035 advertising display
faces located in and around Metro New York, Northern New Jersey and Hudson
Valley for a purchase price of approximately $40 million in cash.
In February 1997 the Company acquired certain assets of (i) Adcraft,
Inc. (the "Evansville Acquisition") for approximately $5.5 million in cash
and (ii) Klein Outdoor Advertising (the "New Jersey Acquisition", and
together with the Evansville Acquisition, the "February Acquisitions")for
approximately $5.3 million in cash. As a result of the February
Acquisitions, the Company acquired approximately 135 advertising display
faces located in and around Evansville, Indiana and approximately 12 existing
advertising display faces and 35 in process display faces in New Jersey.
In March 1997 the Company acquired certain assets of TransAd, Inc.(the
"TransAd Acquisition") for approximately $8.5 million in cash. As a result of
the TransAd Acquisition, the Company acquired approximately 600 transit
advertising panels in and
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around Memphis, Tennessee.
In April 1997, the Company agreed to acquire the outdoor advertising
assets of Allied Outdoor Advertising, Inc. for approximately $51.2 million in
cash (the "Allied Acquisition"). Upon consummation of the Allied Acquisition
in July 1997, the Company acquired approximately 90 outdoor advertising
display faces in New York City and New Jersey.
In June 1997, the Company acquired the stock of Penn Advertising of
Baltimore from Lamar Advertising, (the "Penn Acquisition"), for approximately
$46.5 million in cash. As a result of the Penn Acquisition, the Company
acquired approximately 1,440 advertising display faces located in Baltimore,
Maryland.
In May 1997, the Company increased the total commitment of its revolving
credit facility to $300 million by adding a $75 million term loan which was
drawn by the Company in order to pay down outstanding amounts owed by the
Company under its revolving credit facility. At June 30, 1997 the Company's
credit facility had approximately $181.3 million outstanding.
Net cash provided by operating activities increased to $7.7 million for
the six months ended June 30, 1997 from $6.2 million for the 1996 period.
Net cash provided by operating activities reflects the Company's net income
adjusted for non-cash items and the use or source of cash for the net change
in working capital.
The Company's net cash used in investing activities of $185.9 million
for the six months ended June 30, 1997 includes cash used for acquisitions of
$177.3 million and other capital expenditures of $8.6 million. Capital
expenditures have been made primarily to develop new structures in each of
the markets. The Company intends to continue to develop new structures in
its markets and to consider potential acquisitions in the Midwestern,
Southeastern and Eastern regions and contiguous markets. Management believes
that its internally generated funds, together with available borrowings under
its credit facility, will be sufficient to satisfy its cash requirements,
including anticipated capital expenditures, for the foreseeable future.
However, in the event cash from operations, together with available funds
under the Company's credit facility are insufficient to satisfy its cash
requirements, the Company may obtain funds from additional sources of
indebtedness and/or equity offerings by Parent to finance its operations
including, without limitation, additional acquisitions.
For the six months ended June 30, 1997, $159.3 million was provided by
financing activities due to increased borrowings under the Company's credit
facilities. For the 1996 period, $104.0 million was used in financing
activities primarily due to acquisitions.
NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards (SFAS) No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION, which established a new accounting
principle for reporting information about
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operating segments in annual financial statements and interim financial
reports. It also established standards for related disclosures about
products and services, geographic areas and major customers. SFAS No. 131
is effective for fiscal years beginning after December 15, 1997. The Company
is currently evaluating the applicability of this standard. However, the
Company does not expect a material impact on disclosures in the Company's
financial statements.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Note 5 to the financial statements of the Company included in Part I of
this report is hereby incorporated by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
NUMBER DESCRIPTION
2.1 Stock Purchase Agreement dated as of June 3, 1997 among
Florida Logos, Inc., The Lamar Corporation, Lamar
Advertising Company, as Guarantor, and the Company.
2.2 Agreement to purchase certain assets, dated as of June
30, 1997, among Amelia Newman, Marilyn Cole, Universal
Outdoor (N.Y.) Advertising Acquisition Corporation,
Universal Outdoor, Inc. and Allied Outdoor Advertising,
Inc.
3.1 Third Amended and Restated Articles of Incorporation of
the Registrant (incorporated herein by reference to
Exhibit 3.1 of the Company's Registration Statement on
Form S-1 (File No. 333-12427) (the "Registration
Statement"))
3.2 Second Amended and Restated By-Laws of the Registrant
(incorporated herein by reference to Exhibit 3.2 of the
Registration Statement)
10.1 Term Loan Agreement among the Company, various lending
institutions, LaSalle National Bank as Co-Agent and
Bankers Trust Company as Agent dated as of May 21, 1997
(filed as Exhibit 10.7 to Post-Effective Amendment No.
5 to the Universal Outdoor Holdings, Inc. Registration
Statement on Form S-1 (File No. 33-93852) and
incorporated herein by reference)
10.2 Amended and Restated Credit Agreement among the
Company, various lending institutions, LaSalle National
Bank as Co-Agent and Bankers Trust Company as Agent
dated as of May 21, 1997 (filed as Exhibit 10.8 to
Post-Effective Amendment No. 5 to the Universal Outdoor
Holdings, Inc. Registration Statement on Form S-1 (
File No. 33-93852) and incorporated herein by
reference)
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K - The Registrant filed the following report on Form 8-K
during the quarter ended June 30, 1997:
Form 8-K, filed April 30, 1997 to report the extension of the Registrant's
offer to exchange its 9 3/4% Series B Senior Subordinated Notes due 2006 for
9 3/4% Series B Senior Subordinated Exchange Notes due 2006.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIVERSAL OUTDOOR, INC.
/s/ Brian T. Clingen
Brian T. Clingen
Vice President and Chief Financial Officer
August 7, 1997
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<PAGE>
LIST OF EXHIBITS
NUMBER DESCRIPTION
2.1 Stock Purchase Agreement dated as of June 3, 1997 among Florida
Logos, Inc., The Lamar Corporation, Lamar Advertising Company,
as Guarantor, and the Company.
2.2 Agreement to purchase certain assets, dated as of June 30, 1997,
among Amelia Newman, Marilyn Cole, Universal Outdoor (N.Y.)
Advertising Acquisition Corporation, Universal Outdoor, Inc. and
Allied Outdoor Advertising, Inc.
3.1 Third Amended and Restated Articles of Incorporation of the
Registrant (incorporated herein by reference to Exhibit 3.1 of
the Company's Registration Statement on Form S-1 (File No. 333-
12427) (the "Registration Statement"))
3.2 Second Amended and Restated By-Laws of the Registrant
(incorporated herein by reference to Exhibit 3.2 of the
Registration Statement)
10.1 Term Loan Agreement among the Company, various lending
institutions, LaSalle National Bank as Co-Agent and Bankers Trust
Company as Agent dated as of May 21, 1997 (filed as Exhibit 10.7
to Post-Effective Amendment No. 5 to the Universal Outdoor
Holdings, Inc. Registration Statement on Form S-1 (File No. 33-
93852) and incorporated herein by reference)
10.2 Amended and Restated Credit Agreement among the Company, various
lending institutions, LaSalle National Bank as Co-Agent and
Bankers Trust Company as Agent dated as of May 21, 1997 (filed as
Exhibit 10.8 to Post-Effective Amendment No. 5 to the Universal
Outdoor Holdings, Inc. Registration Statement on Form S-1 ( File
No. 33-93852) and incorporated herein by reference)
27 Financial Data Schedule
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STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 3, 1997
BETWEEN
FLORIDA LOGOS, INC.
AS SELLER
THE LAMAR CORPORATION
LAMAR ADVERTISING COMPANY
AS GUARANTOR
AND
UNIVERSAL OUTDOOR, INC.
AS BUYER
RELATING TO
PENN ADVERTISING OF BALTIMORE, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS/PURCHASE & SALE/CLOSING . . . . . . . 2
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Transfer of Purchased Stock. . . . . . . . . . . . . . . . . . 7
1.3 Purchase of the Purchased Stock by Buyer / Purchase Price. . . 8
1.4 The Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.5 Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . 8
1.6 June 1st Through 3rd . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING SELLER, LAMAR,
GUARANTOR, THE COMPANY AND THE PURCHASED STOCK . . . . 10
2.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.4 Title to Purchased Stock . . . . . . . . . . . . . . . . . . . 12
2.5 Company Debt . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.6 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . 13
2.7 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 13
2.8 Accuracy of Information. . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
ADDITIONAL REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY . . 14
3.1 Organization and Good Standing . . . . . . . . . . . . . . . . 14
3.2 Company Stock. . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.4 Financial Statements; Changes; Contingencies . . . . . . . . . 15
3.5 Taxes and Tax Returns. . . . . . . . . . . . . . . . . . . . . 16
3.6 Material Contracts . . . . . . . . . . . . . . . . . . . . . . 16
3.7 Real and Personal Property; Title to Property; Leases. . . . . 17
3.8 Intangible Property. . . . . . . . . . . . . . . . . . . . . . 17
3.9 Legal Proceedings and Certain Labor Matters. . . . . . . . . . 18
3.10 Minute Books . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.11 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.12 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . 18
3.13 Dividends and Other Distributions. . . . . . . . . . . . . . . 19
3.14 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . 19
3.15 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 21
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3.16 Certain Interests. . . . . . . . . . . . . . . . . . . . . . . 21
3.17 Intercompany Transactions. . . . . . . . . . . . . . . . . . . 22
3.18 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.19 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . 22
3.20 Accuracy of Information. . . . . . . . . . . . . . . . . . . . 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . 22
4.1 Organization and Related Matters . . . . . . . . . . . . . . . 22
4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3 No Conflicts; Consents . . . . . . . . . . . . . . . . . . . . 23
4.4 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . 23
4.5 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 23
4.6 Investment Representation. . . . . . . . . . . . . . . . . . . 24
4.7 Accuracy of Information. . . . . . . . . . . . . . . . . . . . 24
ARTICLE V
ADDITIONAL CONTINUING COVENANTS . . . . . . . . 24
5.1 Nondisclosure of Proprietary Data. . . . . . . . . . . . . . . 24
5.2 Tax Cooperation. . . . . . . . . . . . . . . . . . . . . . . . 25
5.3 Vesting in Certain Pension Plans . . . . . . . . . . . . . . . 25
ARTICLE VI
ITEMS TO BE DELIVERED AT CLOSING. . . . . . . . 25
6.1 By Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2 By Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII
INDEMNIFICATION . . . . . . . . . . . . 27
7.1 Obligations of Seller. . . . . . . . . . . . . . . . . . . . . 27
7.2 Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . 28
7.3 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.4 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.5 Limitations on Indemnification . . . . . . . . . . . . . . . . 34
7.6 Sharing of Amounts Recovered from Working Capital and Claims
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . 34
7.7 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . 36
7.8 Actual Damages . . . . . . . . . . . . . . . . . . . . . . . . 36
7.9 Treatment of Payments. . . . . . . . . . . . . . . . . . . . . 37
7.10 Assignment of Claim for Breach . . . . . . . . . . . . . . . . 37
ARTICLE VIII
GENERAL . . . . . . . . . . . . . . 37
8.1 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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8.2 Amendments; Waivers. . . . . . . . . . . . . . . . . . . . . . 37
8.3 Schedules; Exhibits; Integration . . . . . . . . . . . . . . . 38
8.4 Best Efforts; Further Assurances . . . . . . . . . . . . . . . 38
8.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 38
8.6 No Assignment. . . . . . . . . . . . . . . . . . . . . . . . . 38
8.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.9 Publicity and Reports. . . . . . . . . . . . . . . . . . . . . 39
8.10 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 39
8.11 Parties in Interest. . . . . . . . . . . . . . . . . . . . . . 40
8.12 Performance by Subsidiary. . . . . . . . . . . . . . . . . . . 40
8.13 Notices and Payment Instructions . . . . . . . . . . . . . . . 40
8.14 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.16 Attorney's Fees. . . . . . . . . . . . . . . . . . . . . . . . 41
8.17 Representation By Counsel . . . . . . . . . . . . . . . . . . 41
8.18 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 41
8.19 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.20 Knowledge Convention . . . . . . . . . . . . . . . . . . . . . 42
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SCHEDULES
Schedule 1.5A [Reserved]
Schedule 1.5B Net Working Capital Calculation
Schedule 3.1 Organization and Good Standing
Schedule 3.2 Company Stock
Schedule 3.3 No Conflicts
Schedule 3.4 Financial Statements; Changes; Contingencies
Schedule 3.5 Taxes and Tax Returns
Schedule 3.6 Material Contracts
Schedule 3.7 Real and Personal Property; Title to Property; Leases
Schedule 3.9 Legal Proceedings and Certain Labor Matters
Schedule 3.11 Permits
Schedule 3.13 Dividends and Other Distributions
Schedule 3.14 Employee Benefits
Schedule 3.14A Employee Pension Benefit Plans
Schedule 3.14B Employee Pension Benefit Plans Subject to Title IV Plans
Schedule 3.14C Multiemployer Plans
Schedule 3.15 Environmental Matters
Schedule 3.16 Certain Interests
Schedule 3.18 Insurance
EXHIBITS
Exhibit D Secondary Escrow Agreement
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<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into as of June 3, 1997, by
and among Florida Logos, Inc., a Florida corporation ("SELLER"), Universal
Outdoor, Inc., an Illinois corporation ("BUYER"); The Lamar Corporation, a
Louisiana Corporation ("LAMAR"), a party hereto for the limited purpose of
making certain warranties, representations, agreements and indemnities and
Lamar Advertising Company, a Delaware Corporation as Guarantor ("GUARANTOR").
R E C I T A L S
WHEREAS, an Affiliate of Seller, Lamar, pursuant to a Stock Purchase
Agreement (the "Penn Agreement") dated as of February 7, 1996 by and among Lamar
Advertising Company and (i) the owners of all of the capital stock of Appleton,
Inc., a Delaware corporation ("Appleton"); and (ii) the owners of all of the
capital stock of Penn Advertising, Inc. ("Penn") other than Appleton, purchased
of all of the issued and outstanding capital stock of Penn and Appleton.
Hereinafter the owners prior to the purchase by Lamar of all of the capital
stock of Appleton are referred to as the "Appleton Sellers" and the owners prior
to the purchase by Lamar of all of the capital stock of Penn except for Appleton
are referred to as the "Penn Sellers" (Collectively the Penn Sellers and the
Appleton Sellers are referred to as the "Penn Agreement Sellers"). A copy of the
Penn Agreement has previously been provided to Buyer.
WHEREAS, as a result of the closing of the Penn Agreement, Penn
Advertising of Baltimore, Inc. (the "COMPANY") became a wholly-owned
second-tier subsidiary of Lamar, whose direct parent was Penn.
WHEREAS, as a result of an Act of Exchange dated May 1, 1997 by and
between Lamar Advertising of Penn, Inc. (the current name of Penn) and Seller,
Company became a wholly-owned subsidiary of Seller.
WHEREAS, Seller desires to sell, and Buyer desires to buy, all of the
issued and outstanding capital stock of the Company (the "Purchased Stock") for
the consideration described herein.
WHEREAS, Seller and Lamar intend to pass-through to Buyer first charge
on a portion of certain Escrow Accounts created pursuant to the Penn Agreement;
and
WHEREAS, Buyer has performed certain due diligence and business
investigations with respect to the Company, with the intention that Buyer form
its own conclusions regarding the condition and value of the business, property,
liabilities, contracts and related matters of the Company pursuant to the
parties' express intention that the transactions contemplated hereunder be with
the limited representations and warranties by Seller as specifically set forth
herein.
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AGREEMENT
In consideration of the mutual promises contained herein and intending
to be legally bound the parties agree as follows:
ARTICLE I
DEFINITIONS/PURCHASE & SALE/CLOSING
1.1 DEFINITIONS.
As used in this Agreement and the Exhibits and Schedules delivered
pursuant to this Agreement, the following definitions shall apply.
"ACTION" means any action, complaint, petition, investigation, suit
or other proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or Governmental Entity.
"ADVERTISER EFFECT" means any and all legal, financial, or other
effects, on or to this Agreement, the Transactions, the Company, the Business,
the Seller, Lamar, the Guarantor, the Buyer or any of their shareholders,
Affiliates or Associates, that may arise from or are in any way related to any
public or non-public discussion, announcement, development, settlement, Order or
change in status of any nature or type regarding or relating to any Action or
potential Action, or negotiation concerning any such Actions, which discusses,
relates to, concerns, or actually results in any voluntary or non-voluntary
cessation of or a legal ban on the use of the outdoor advertising services of
any Person, including Seller or Company, by any Person or group of Persons.
"AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person.
"AGREEMENT" means this Stock Purchase Agreement by and among Buyer and
Seller as amended or supplemented together with all Exhibits and Schedules
attached or incorporated by reference.
"APPLETON" means Appleton, Inc.
"APPROVAL" means any approval, authorization, consent, qualification
or registration, or any waiver of any of the foregoing, required to be obtained
from, or any notice, statement or other communication required to be filed with
or delivered to, any Governmental Entity or any other Person.
"AREA" means the area in which the Business is conducted on the
Closing Date.
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"ASSOCIATE" of a Person means:
(i) a corporation or organization (other than the Company or a
party to this Agreement) of which such person is an officer or partner or is,
directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities;
(ii) any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee or
in a similar capacity; and
(iii) any relative or spouse of such person or any relative of
such spouse who has the same home as such person or who is a director or officer
of the Company or any of its Affiliates.
"BUSINESS" means the business of the Company, and shall be deemed to
include all of the following aspects of such business: income, operations,
condition (financial or other), and assets and properties (including without
limitation goodwill).
"BUYER" has the meaning set forth in the Preamble hereto.
"BUYER 11.5(b) CLAIMS" has the meaning as set forth in Section 7.6(a)
hereof.
"BUYER'S AUDITORS" means Price Waterhouse, independent public
accountants to Buyer.
"BUYER CLAIMS ESCROW ACCOUNT PORTION" is defined in section 7.6(b).
"BUYER NET WORKING CAPITAL" is defined in section 1.5(a).
"BUYER TARGET WORKING CAPITAL" means $1,250,000.00.
"CLOSING" means the consummation of the purchase and sale of the
Purchased Stock under this Agreement as described in Section 1.4.
"CLOSING DATE" means the date of the Closing.
"CLOSING DATE BALANCE SHEET" has the meaning set forth in Section
1.5(a).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the Recitals to this Agreement.
"COMPANY'S AUDITORS" means, independent accountants to Company.
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"CONTRACT" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"CURRENT ASSETS" means those categories of items identified as current
assets in Schedule 1.5B to the Penn Agreement, determined in accordance with
GAAP, consistently applied with past practices of the Company, EXCEPT THAT,
Working Capital, may, at Seller's option, not include any cash or marketable
securities.
"CURRENT LIABILITIES" means those categories of items identified as
current liabilities in Schedule 1.5B to the Penn Agreement, determined in
accordance with GAAP, consistently applied with past practices of the Company.
"DISCLOSURE SCHEDULES" means the Disclosure Schedules pursuant to the
Penn Agreement.
"ENCUMBRANCE" means mortgages, pledges, liens, claims, charges,
security interests, options, hypothecations, easements, restrictions (on
transfer, voting or otherwise) or conditional sale or other restriction
agreements, or other encumbrances.
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 3.15.
"EQUITY SECURITIES" means any capital stock or other equity interest
or any securities convertible into or exchangeable for capital stock or any
other rights, warrants or options to acquire any of the foregoing securities.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations and published interpretations.
"ERISA AFFILIATE" has the meaning set forth in Section 3.14(c).
"ESCROW ACCOUNTS" means the Escrow Accounts as defined in the Penn
Agreement.
"ESCROW AGENT" means the Escrow Agent as defined in the Penn
Agreement.
"ESCROW AGREEMENT" means that certain Escrow Agreement executed and
delivered pursuant to the Penn Agreement.
"ESCROW FUND" means the Escrow Fund as defined in the Penn Agreement.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 3.4(a).
"FIRST REPRESENTATIVE" has the meaning set forth in Section 12.13 of
the Penn Agreement.
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"GAAP" means generally accepted accounting principles as in effect from
time to time.
"GOVERNMENTAL ENTITY" means any government or any agency, bureau,
board, commission, court, department, official,, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
"HSR APPROVAL" means the final expiration of any applicable waiting
period, or the early termination by the appropriate governmental authorities of
any such waiting period, pursuant to the Hart-Scott-Rodino Act.
"HART-SCOTT-RODINO ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the related regulations and published
interpretations.
"INDEMNIFIABLE CLAIM" means any Loss for or against which any party is
entitled to indemnification under this Agreement; "INDEMNIFIED PARTY" means the
party entitled to indemnity hereunder; and "INDEMNIFYING PARTY" means the party
obligated to provide indemnification hereunder.
"INTANGIBLE PROPERTY" means any trade secret, secret process or other
confidential information or know-how and any and all Marks.
"IRS" means the Internal Revenue Service or any successor entity.
"LAW" means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity and any Order.
"LOSS" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified person.
"MARK" means any brand name, copyright, patent, service mark,
trademark, tradename, and all registrations or application for registration of
any of the foregoing.
"MATERIAL ADVERSE EFFECT" means a fact, circumstance or event which
has had or would reasonably be expected to have, directly or indirectly, a
material adverse effect on the Business; PROVIDED, HOWEVER, any Advertiser
Effect shall not for any purpose hereunder be considered a Material Adverse
Effect.
"MATERIAL CONTRACT" has the meaning set forth in Section 3.6.
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"NET TAX BENEFIT" has the meaning set forth in Section 7.3(m).
"NET WORKING CAPITAL" means Current Assets less Current Liabilities.
"ORDER" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENN" means Penn Advertising, Inc.
"PENN AGREEMENT SELLERS" means all of the Penn Sellers and the
Appleton Sellers collectively.
"PERMIT" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.
"PRE-CLOSING TAXES" has the meaning set forth in Section 7.3(h).
"PERSON" means an association, a corporation, an individual, a
partnership, a trust, a limited liability company or any other entity or
organization, including a Governmental Entity.
"PURCHASE PRICE" has the meaning set forth in Section 1.3.
"PURCHASED STOCK" means the shares of stock being sold hereunder,
comprised of all of the issued and outstanding shares of the capital stock of
the Company.
"SECOND REPRESENTATIVE" has the meaning set forth in Section 12.13
of the Penn Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" has the meaning set forth in the Preamble hereto.
"SELLER 11.5(b) CLAIMS" has the meaning as set forth in Section 7.6(a)
hereof.
"SELLER CLAIMS ESCROW ACCOUNT PORTION" is defined in Section 7.6(c).
"SELLER NET RECOVERY" is defined in Section 7.1(b).
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"SELLER REPRESENTATIVES" has the meaning set forth in Section 12.13
of the Penn Agreement.
"SUBSIDIARY" means, with respect to Penn, any Person in which Penn has
a direct or indirect voting equity or voting ownership interest equal to or in
excess of 50%.
"TAX" means any foreign, federal, state, county or local income, sales
and use, excise, franchise, real and personal property, transfer, gross receipt,
capital stock, production, business and occupation, disability, employment,
payroll, severance or withholding tax or charge imposed by any Governmental
Entity, any interest and penalties (civil or criminal) related thereto or to the
nonpayment thereof, and any Loss in connection with the determination,
settlement or litigation of any Tax liability.
"TAX BENEFIT" has the meaning set forth in Section 7.3.
"TAX REIMBURSEMENT AMOUNT" has the meaning set forth in Section 7.3.
"TAX RETURN" means a report, return or other information required to
be supplied to a Governmental Entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that includes the Company or its Subsidiary.
"TRANSACTIONS" means any and all of the transactions, including
without limitation the conveyance of the Purchased Stock by Seller in return for
the payment of the Purchase Price by Buyer, contemplated by or arising from this
Agreement.
"WARN ACT" means the Worker Adjustment and Retraining Notification Act
of 1988, 29 U.S.C 2101 et seq., as amended.
"WORKING CAPITAL AND CLAIMS ESCROW ACCOUNT" means the Working Capital
and Claims Escrow Account as defined in the Penn Agreement.
"WORKING CAPITAL ESCROW ACCOUNT" means the Working Capital Escrow
Account as defined in the Penn Agreement.
1.2 TRANSFER OF PURCHASED STOCK.
Seller covenants and agrees with Buyer that, subject to the terms and
conditions of this Agreement, on the Closing Date, Seller shall sell and deliver
to Buyer, and Buyer shall purchase, all right, title, and interest, legal and
equitable, in and to the Purchase Stock then owned by Seller in exchange for
payment of the Purchase Price in accordance with Section 1.3 hereof. Seller
shall deliver the certificates evidencing the Purchased Stock owned by Seller to
Buyer at the Closing. The certificates will be properly endorsed for transfer to
or accompanied by a duly executed stock power in favor of Buyer or its nominee
as Buyer may have directed
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prior to the date hereof, otherwise in a form acceptable for transfer on the
books of the Company, as the case may be. Seller will pay any Taxes payable with
respect to the transfer of the Purchased Stock.
1.3 PURCHASE OF THE PURCHASED STOCK BY BUYER/PURCHASE PRICE.
Subject to the terms and conditions of this Agreement, Buyer agrees to
(i) acquire the Purchased Stock for an aggregate amount of $46,500,000 (the
"PURCHASE PRICE") and (ii) pay to Seller or its assigns in immediately available
funds the Purchase Price at the Closing.
1.4 THE CLOSING.
Delivery of the Purchased Stock and payment of the Purchase Price (the
"CLOSING") shall take place by wire transfer, by fax and by overnight courier.
The Closing shall be effective at 5:00 pm, central time, on the Closing Date.
Unless the parties otherwise mutually agree in writing, the Closing shall occur
on June 3, 1997.
1.5 PURCHASE PRICE ADJUSTMENT.
Following the Closing, the Purchase Price shall be adjusted as
provided herein to reflect changes in Buyer Net Working Capital from Buyer
Target Working Capital.
(a) Within thirty 30 days following the closing of the this
Agreement, Seller shall cause to be prepared and delivered to Buyer a balance
sheet for Company as of May 31, 1997 (the "CLOSING DATE BALANCE SHEET") along
with a statement setting forth the Net Working Capital as calculated based on
the Closing Date Balance Sheet ("Buyer Net Working Capital"), and the amount, if
any, owing by either Seller or Buyer as a result of the Buyer Net Working
Capital as calculated based on the Closing Date Balance Sheet being either less
or more, respectively than Buyer Target Working Capital. The Closing Date
Balance Sheet shall be prepared in accordance with GAAP, consistently applied
with past practices of the Company. Buyer shall cause the Company and its
employees and agents to assist the Seller in the preparation of the Closing Date
Balance Sheet.
(b) Within 20 days after receipt of the Closing Date Balance Sheet,
Buyer shall, in a written notice to Seller, either accept the Closing Date
Balance Sheet or describe in reasonable detail any proposed adjustments and the
reasons therefor. Buyer agrees that the proposed adjustments, if any, will not
involve changes in the methodology of the practices of the Company which have
been consistently applied in determining the carrying value of the assets and
liabilities (including valuation accounts, pools and reserves and recognition of
contingent liabilities) as set forth in the balance sheet included in the
December 31, 1996 unaudited financial statements of the Company. Any such notice
of proposed adjustment shall be effective only if the Company receives a letter
from Buyer's Auditors to the effect that such proposed adjustments are requried
in order to state the recorded assets and liabilities in accordance with GAAP,
consistently applied with past practices of Company, in accordance with
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the provisions of this Agreement, and shall include copies of all detailed
calculations and supporting work papers for such proposed adjustments. If Seller
has not received such notice of proposed adjustments within such 20 day period,
Buyer will be deemed irrevocably to have accepted the Closing Date Balance
Sheet.
(c) Buyer and Seller shall negotiate in good faith to resolve any
disputes over any proposed adjustments to the Closing Date Balance Sheet,
provided, that if any such dispute is not resolved within 10 days following
Seller's receipt of the proposed adjustments: (i) if an accounting firm has been
or will be engaged to resolve any disputes pursuant to Section 1.5 of the Penn
Agreement, subject to the consent of Buyer, which consent may be withheld in its
sole discretion, such accounting firm shall be engaged to resolve such disputes;
or (ii) if no accounting firm has been or will be engaged pursuant to Section
1.5 of the Penn Agreement, or if Buyer has not consented to such engagement as
required by clause (i) above, Buyer and Seller shall jointly select and engage
within 5 days a national independent public accounting firm to resolve such
disputes. The resolution of such disputes by such accounting firm, however
selected, shall be final and binding and not subject to review or challenge of
any kind. Such accounting firm shall conduct an audit of those items in the
Closing Date Balance Sheet subject to dispute and deliver written notice to each
of Buyer and Seller within 30 days after its engagement, setting forth what
adjustments, if any, to the Closing Date Balance Sheet are required in
accordance with GAAP, consistently applied with past practices of the Company,
to resolve any such disputes; provided that no such report shall require any
adjustments if all such adjustments would result in an aggregate increase or
decrease in Buyer Net Working Capital of less than $25,000. If the aggregate
amount of the adjustments required by such report results in any reduction in
Buyer Net Working Capital, Seller shall pay a portion of the fees and expenses
of such accounting firm based on the ratio that the aggregate amount of such
reduction in Buyer Net Working Capital bears to the aggregate amount of all
disputed items. Buyer shall be responsible for all other fees and expenses of
such accounting firm.
(d) Upon acceptance of the Closing Date Balance Sheet by Buyer or the
resolution of any disputes, (i) if the Buyer Net Working Capital as calculated
based on the Company Closing Date Balance Sheet is greater than Buyer Target
Working Capital by more than $125,000.00, Buyer promptly, but no later than 5
days after such acceptance, shall pay to Seller the amount by which the
difference between Buyer Net Working Capital and Buyer Target Working Capital
exceeds $125,000.00, together with interest thereon from the Closing Date to the
date of payment thereof as determined below, and (ii) if the Buyer Net Working
Capital as calculated based on the Company Closing Date Balance Sheet is less
than Buyer Target Working Capital by more than $125,000, Seller promptly, but no
later than 5 days after such acceptance, shall pay to Buyer the amount by which
the difference between Buyer Target Working Capital and Buyer Net Working
Capital exceeds $125,000.00, together with interest thereon from the Closing
Date to the date of payment thereof as determined below.
(e) For the purposes of this Section 1.5, interest will be payable at
the "prime" rate, as announced by The Chase Manhattan Bank from time to time to
be in effect, or, if that rate is no longer established or published, a
comparable interest rate. For purposes
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of this Section 1.5, interest shall be calculated based on a 365 day year and
the actual number of days elapsed.
1.6 JUNE 1ST THROUGH 3RD. Beginning on June 1, 1997, all income and
expense of the Company shall be for the benefit or obligation of the Buyer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING SELLER, LAMAR,
GUARANTOR, THE COMPANY AND THE PURCHASED STOCK
2.1 ORGANIZATION.
Seller represents and warrants that: (i) Seller is a corporation,
duly organized, validly existing and in good standing under the laws of
Florida; and (ii) Seller has all requisite corporate power and authority and
legal right to own its properties and to carry on its business. Lamar
represents and warrants that: (i) Lamar is a corporation, duly organized,
validly existing and in good standing under the laws of Louisiana; and (ii)
Lamar has all requisite corporate power and authority and legal right to own
its properties and to carry on its business. Guarantor represents and
warrants that: (i) Guarantor is a corporation, duly organized, validly
existing and in good standing under the laws of Delaware; and (ii) Guarantor
has all requisite corporate power and authority and legal right to own its
properties and to carry on its business.
2.2 AUTHORIZATION.
(a) Seller represents and warrants:
The execution, delivery and performance of this Agreement by Seller,
and the transactions contemplated hereby, have been duly and validly authorized
by all necessary corporate action on the part of Seller. This Agreement has been
duly and validly executed and delivered by Seller and constitutes the legally
valid and binding obligation of Seller, enforceable against it in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors rights generally. Seller has all
power and authority necessary to transfer the Purchased Stock.
(a) Lamar represents and warrants:
The execution, delivery and performance of this Agreement by Lamar,
and the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of Lamar. This
Agreement has been duly and validly executed and delivered by Lamar and
constitutes the legally valid and binding obligation of Lamar, enforceable
against it in accordance with its terms except as such enforceability may be
limited
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by bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors rights generally.
(c) Guarantor represents and warrants:
The execution, delivery and performance of this Agreement by
Guarantor, and the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of Guarantor. This
Agreement has been duly and validly executed and delivered by Guarantor and
constitutes the legally valid and binding obligation of Guarantor, enforceable
against it in accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles relating to or limiting creditors rights
generally.
2.3 NO CONFLICTS; CONSENTS.
(a) Seller represents and warrants that:
The execution, delivery and performance of this Agreement by Seller,
and the performance of the transactions contemplated hereby, will not (a)
violate, accelerate, terminate or conflict with the provisions of, or constitute
a breach or default (whether upon lapse of time and/or the occurrence of any act
or event or otherwise) under, the charter documents or by-laws of Seller or any
of its Subsidiaries, or any Contract of Seller, or any of its Subsidiaries,
relating to its investment in the Company or to which the Purchased Stock is
bound, (b) result in the imposition of any Encumbrance against the Purchased
Stock, any asset or property of Seller, or any of its Subsidiaries, or (c)
violate or conflict with any Law, order, judgment, injunction or decree
applicable to Seller, or any of its Subsidiaries, where such violation would
have a material adverse effect on the business condition and results of
operations of Seller, or any of its Subsidiaries, or the ability of Seller, or
any of its Subsidiaries, to perform its obligations hereunder. No registrations,
filings, applications, notices, consents, approvals, orders, qualifications,
authorizations or waivers are required to be made, filed, given or obtained by
the Seller or any of its Subsidiaries (or, by reason of facts pertaining to
Seller, any of its Subsidiaries or the Company, on the part of Buyer) with, to
or from any Persons (including Governmental Entities) in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for filings under the Hart-Scott-Rodino Act.
(b) Lamar represents and warrants that:
The execution, delivery and performance of this Agreement by Lamar,
and the performance of the transactions contemplated hereby, will not (a)
violate, accelerate, terminate or conflict with the provisions of, or constitute
a breach or default (whether upon lapse of time and/or the occurrence of any act
or event or otherwise) under, the charter documents or by-laws of Lamar or any
of its Subsidiaries, or any Contract of Lamar, or any of its Subsidiaries,
relating to its investment in the Company or to which the Purchased Stock is
bound, (b) result
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in the imposition of any Encumbrance against the Purchased Stock, any asset
or property of Lamar, or any of its Subsidiaries, or (c) violate or conflict
with any Law, order, judgment, injunction or decree applicable to Lamar, or
any of its Subsidiaries, where such violation would have a material adverse
effect on the business condition and results of operations of Lamar, or any
of its Subsidiaries, or the ability of Lamar, or any of its Subsidiaries, to
perform its obligations hereunder. No registrations, filings, applications,
notices, consents, approvals, orders, qualifications, authorizations or
waivers are required to be made, filed, given or obtained by Lamar or any of
its Subsidiaries (or, by reason of facts pertaining to Lamar, any of its
Subsidiaries or the Company, on the part of Buyer) with, to or from any
Persons (including Governmental Entities) in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for filings under the Hart-Scott-Rodino Act.
(a) Guarantor represents and warrants that:
The execution, delivery and performance of this Agreement by
Guarantor, and the performance of the transactions contemplated hereby, will not
(a) violate, accelerate, terminate or conflict with the provisions of, or
constitute a breach or default (whether upon lapse of time and/or the occurrence
of any act or event or otherwise) under, the charter documents or by-laws of
Guarantor or any of its Subsidiaries, or any Contract of Guarantor, or any of
its Subsidiaries, relating to its investment in the Company or to which the
Purchased Stock is bound, (b) result in the imposition of any Encumbrance
against the Purchased Stock, any asset or property of Guarantor, or any of its
Subsidiaries, or (c) violate or conflict with any Law, order, judgment,
injunction or decree applicable to Guarantor, or any of its Subsidiaries, where
such violation would have a material adverse effect on the business condition
and results of operations of Guarantor, or any of its Subsidiaries, or the
ability of Guarantor, or any of its Subsidiaries, to perform its obligations
hereunder. No registrations, filings, applications, notices, consents,
approvals, orders, qualifications, authorizations or waivers are required to be
made, filed, given or obtained by the Guarantor or any of its Subsidiaries (or,
by reason of facts pertaining to Guarantor, any of its Subsidiaries or the
Company, on the part of Buyer) with, to or from any Persons (including
Governmental Entities) in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except
for filings under the Hart-Scott-Rodino Act.
2.4 TITLE TO PURCHASED STOCK.
Seller represents and warrants that:
At the Closing, the Seller shall be the sole owner of the Purchased
Stock and shall own the Purchased Stock beneficially and of record, free and
clear of any Encumbrance. As of the Closing, the Purchased Stock will constitute
all of the issued and outstanding Equity Securities of the Company. As of the
Closing Date, the authorized capital stock of the Company will consist of 3,000
shares of Voting Common Stock, $1.00 par value, of which 1,000 shares will be
issued and outstanding. As of the Closing, there will be no outstanding
Contracts or
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other rights to subscribe for or purchase, or Contracts or other obligations to
issue or grant any rights to acquire, any Equity Securities of Company, or to
restructure or recapitalize Company. As of the Closing, there will be no
outstanding Contracts of Company to repurchase, redeem or otherwise acquire any
Equity Securities of the Company. All Equity Securities of Company are duly
authorized, validly issued and are fully paid and nonassessable and issued in
accordance with all applicable federal and state securities laws. As of the
Closing, there will be no preemptive rights in respect of any Equity Securities
of Company. Any Equity Securities of Company which were issued and reacquired by
the Company were so acquired (and, if reissued, so reissued) in compliance with
all applicable Laws, and Company has no outstanding obligation or liability with
respect thereto. Other than as contemplated by this Agreement and, except for
the Penn Agreement, the Seller and Penn are not parties to, or bound by, voting
trusts, stockholder agreements, proxies or other agreements and understandings
in effect with respect to the voting or the transfer of the Purchased Stock. At
the Closing, Buyer will acquire good and marketable title to and complete
ownership of such Purchased Stock to be sold hereunder, free of any
Encumbrance.
2.5 COMPANY DEBT.
Seller warrants to Buyer that Company shall be free of any
indebtedness that is not taken into account in calculating Buyer Net Working
Capital pursuant to Section 1.5 above.
2.6 NO BROKERS OR FINDERS.
Each of Seller, Lamar, and Guarantor represents and warrants that no
agent, broker, finder or investment or commercial banker, or other Person or
firms engaged by or acting on behalf of Seller, Lamar, Guarantor or the Company
or their Affiliates in connection with the negotiation, execution or performance
of this Agreement or the transactions contemplated by this Agreement, is or will
be entitled to any broker's or finder's or similar fees or other commissions as
a result of this Agreement or such transactions.
2.7 LEGAL PROCEEDINGS.
Seller represents and warrants that:
There is no Order or Action pending or to Seller's knowledge,
threatened against or affecting Seller or the Purchased Stock that individually
or when aggregated with one or more other Orders or Actions has had, or if
adversely determined could have, or might reasonably be expected to have a
material adverse effect on Seller's ability to perform this Agreement or any
other aspect of the transactions contemplated by this Agreement except for the
pre-merger investigation of the U.S. Department of Justice concerning the
transactions contemplated by this Agreement opened as a result of Buyer and
Seller's Hart-Scott-Rodino Act filings. Notwithstanding anything to the contrary
in this Section, Buyer agrees that Seller, Lamar and Guarantor shall have no
obligation or liability whatsoever to Buyer pursuant to this Section for any
existing or threatened Order or Action related to any Advertiser Effect.
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2.8 ACCURACY OF INFORMATION.
To Seller's knowledge, none of the written information supplied by or
on behalf of Seller to any Person for inclusion in, and included in, any
document or application filed with any Governmental Entity in connection with
the transactions contemplated by this Agreement contained any untrue statement
of a material fact, or omitted any material fact required to be stated therein,
in light of the circumstances under which they were made, not misleading. All
documents required to be filed by Seller with any Governmental Entity in
connection with this Agreement or the transactions contemplated by this
Agreement will comply in all material respects with the provisions of applicable
law.
2.9 REPRESENTATIONS ON TAXES.
Seller represents that all taxes related to items 4 and 5 on Schedule
3.5 hereto have been timely paid in full.
ARTICLE III
ADDITIONAL REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY
Except as otherwise indicated in the Disclosure Schedules (such
particular schedules referred to in this Article being those original schedules
and updates attached to the Penn Agreement, and also attached hereto and made
part hereof) Seller and Lamar represent, warrant, and agree as follows, each
severally and not jointly, as to itself and to Company, as of April 1, 1997
(except as of some other date specifically set forth below).
3.1 ORGANIZATION AND GOOD STANDING.
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Company has all requisite
corporate power and authority and legal right to own its properties and to carry
on its Business as the same is now being conducted and as the same will be
conducted upon the consummation of the Closing. Company is duly licensed,
qualified to do business and in good standing in each jurisdiction except where
the failure to be so licensed or qualified would not have a Material Adverse
Effect.
3.2 COMPANY STOCK.
As of the Closing Date, the Purchased Stock will constitute all of the
issued and outstanding Equity Securities of Company. As of the Closing Date, the
authorized capital stock of Company will consist of 3000 shares of Voting Common
Stock, $1.00 par value, of which 1,000 shares will be issued and outstanding. As
of the Closing Date, there will be no outstanding Contracts or other rights to
subscribe for or purchase, or Contracts or other obligations to issue or grant
any rights to acquire, any Equity Securities of Company, or to restructure or
recapitalize Company. As of the Closing Date, there will be no outstanding
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Contracts of Penn or Company to repurchase, redeem or otherwise acquire any
Equity Securities of the Company. All Equity Securities of Company are duly
authorized, validly issued and are fully paid and nonassessable and issued in
accordance with all applicable federal and state securities laws. As of the
Closing Date, there will be no preemptive rights in respect of any Equity
Securities of Company. Any Equity Securities of Company which were issued and
reacquired by Penn or the Company were so reacquired (and, if reissued, so
reissued) in compliance with all applicable Laws, and Company has no outstanding
obligation or liability with respect thereto.
3.3 NO CONFLICTS.
The execution, delivery and performance of this Agreement by Seller
will not violate, or constitute a breach or default (whether upon lapse of time
and/or the occurrence of any act or event or otherwise) under, the charter
documents or by-laws of Company, result in the imposition of any material
Encumbrance against any material asset or properties of Company, or violate any
Law applicable to the Company or the Business where such violation would have a
Material Adverse Effect. Except as set forth in Schedule 3.3, the execution,
delivery and performance of this Agreement by Seller will not require any
consent, waiver, authorization or approval of, or the making of any filing with
or giving of notice to, any Person or Governmental Entity (other than as
required under the Hart-Scott-Rodino Act), except for such consents, waivers,
authorizations or approvals which the failure to obtain would not reasonably be
expected to have a Material Adverse Effect.
3.4 FINANCIAL STATEMENTS; CHANGES; CONTINGENCIES.
(a) AUDITED FINANCIAL STATEMENTS. Seller has delivered to Buyer the
consolidated balance sheets for Penn and its Subsidiary at December 31, 1994 and
December 31, 1995 and the related consolidated statements of income and cash
flow for the years then ended. Such balance sheets and statements of income and
cash flow (collectively, the "FINANCIAL STATEMENTS") have been examined by the
Penn Auditors whose reports thereon are included with the Financial Statements.
The Financial Statements have been prepared in conformity with GAAP consistently
applied, and present fairly, in all material respects, the information set forth
therein. Since December 31, 1995, there has been no material change in any of
the significant accounting policies, practices or procedures of Penn and its
Subsidiary.
(b) UNAUDITED FINANCIAL STATEMENTS. Seller has provided to Buyer
copies of the unaudited consolidated and consolidating balance sheet for Penn
and its Subsidiary as of December 31, 1996 and the consolidated and
consolidating statements of income and the consolidated statement of cash flows
for the year then ended. Such financial statements have been prepared in
conformity with GAAP consistently applied with past practices of Penn, provided
that such financial statements do not include footnotes, and present fairly, in
all material respects, the consolidated financial position of Penn and its
Subsidiary as of such date and the consolidated results of operations of Penn
and its Subsidiary for such period.
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(c) NO MATERIAL ADVERSE CHANGES. Except as set forth in Schedule
3.4, since December 31, 1996, there has not been, occurred or arisen:
(i) any change in or event affecting Penn or its Subsidiary
that has had or would have a Material Adverse Effect, other than any
change or event affecting economic conditions generally or changes
affecting generally the industry in which the Company operates,
(ii) any strike or other labor dispute, or
(iii) any casualty, loss, damage or destruction (whether or not
covered by insurance) of any material property of Penn that has
involved or may involve a loss to Penn of more than $100,000 in excess
of applicable insurance coverage.
(d) NO OTHER LIABILITIES OR CONTINGENCIES. Neither Penn nor its
Subsidiary has any material liabilities required to be disclosed in
accordance with GAAP which have not been disclosed in such December 31, 1996
financial statements set forth in clause (b) above, except for liabilities
that were incurred after December 31, 1996 in the ordinary course of business
or as set forth in Schedule 3.4; PROVIDED that such liabilities incurred in
the ordinary course of business have not had a Material Adverse Effect.
(e) NO REPRESENTATIONS REGARDING PROJECTIONS. Notwithstanding
anything to the contrary herein, Seller makes no representation or warranty with
respect to any projections contained in any materials provided to Buyer.
3.5 TAXES AND TAX RETURNS.
Except as set forth on Schedule 3.5, Penn or the Company has timely
filed or will file all required Tax Returns and have paid all Taxes due for
ail periods ending on or before the date hereof. All required Tax Returns,
including amendments to date, have been prepared in good faith without
negligence or willful misrepresentation and are complete and accurate in all
material respects. Adequate provision has been made in the books and records
of Penn or the Company, and to the extent required by GAAP consistently
applied with past practices of Penn and the Company, in the financial
statements referred to in Section 3.4 above or delivered or to be delivered
to Buyer, for all Taxes whether or not due and payable and whether or not
disputed. Company has not elected to be treated as a consenting corporation
under Section 341(f) of the Code. Except as set forth in Schedule 3.5, no
Governmental Entity has, during the past three years, examined or is in the
process of examining any Tax Return of Penn or the Company. Except as set
forth in Schedule 3.5, no Governmental Entity has proposed, asserted or
assessed or, to the best knowledge of such Seller, threatened to propose or
assert, any deficiency, assessment or claim for Taxes.
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3.6 MATERIAL CONTRACTS.
Schedule 3.6 lists each Contract to which Company is a party or to
which Company, or any of its properties is subject or by which any are bound,
that (a) after December 31, 1996 obligates Company to pay an amount of $100,000
or more, (b) represents a contract which is material to the Business, (c)
provides for an extension of credit other than consistent with normal credit
terms, (d) limits or restricts the ability of Company to compete or otherwise to
conduct its business in any manner or place or (e) provides for a guaranty or
indemnity by Company (each such Contract shall be deemed to be a "MATERIAL
CONTRACT"). True copies of the written agreements identified in Schedule 3.6
have been made available to Buyer. Each Material Contract is valid and
subsisting; Company has duly performed all its material obligations thereunder
to the extent that such obligations to perform have accrued; and except as set
forth in Schedule 3.6, no material breach or default, alleged material breach or
default, or event which would (with the passage of time, notice or both)
constitute a material breach or default thereunder by Company, or to Seller's
knowledge, any other party or obligor with respect thereto, has occurred or as a
result of the execution, delivery or performance of this Agreement will occur.
3.7 REAL AND PERSONAL PROPERTY; TITLE TO PROPERTY; LEASES.
Company has title to or other right to use, free of Encumbrances, all
items of real property, including fees (for which properties Company has good,
valid and merchantable title), leaseholds, easements and all other interests in
real property, and such other assets and properties that are material to the
Business, except for (a) Encumbrances consisting of liens for Taxes not yet due,
(b) other Encumbrances, defects or disputes with respect to leaseholds not
accounting, in the aggregate, for more than 2.5% of the gross revenue of Penn
and its Subsidiary for fiscal year 1996, and (c) other makers disclosed in
Schedule 3.7. All material tangible properties of Company are in a good state of
maintenance and repair (except for ordinary wear and tear) and are adequate for
the Business. All leasehold properties held by Company as lessee are held under
valid, binding and enforceable leases, subject only to such exceptions as are
not, in the aggregate, reasonably expected to have a Material Adverse Effect.
All of Company's outdoor advertising structures, panels and faces, and all
appurtenances thereto (a) are in existence, as is all other tangible property,
(b) meet the requirements of all existing applicable outdoor advertising
Contracts (including number of boards and illumination) and (c) to the knowledge
of Seller, were built and at such time were in conformity in all material
respects with all applicable Laws. All of the panels are legal and conforming,
or legal and non-conforming, and have valid state, county and city permits and
tags (if required).
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3.8 INTANGIBLE PROPERTY.
Company has complete rights to and ownership of all Intangible
Property required for use in connection with the Business, the absence of which
would have a Material Adverse Effect. Company has in all material respects
performed all obligations required to be performed by it, and is not in default
in any material respect under any Material Contract relating to any of the
foregoing. Neither such Seller nor Company has received any written notice to
the effect that the Intangible Property or any use by Company of any such
property conflicts with or allegedly conflicts with or infringes or allegedly
infringes the rights of any Person or that any such Intangible Property is owned
or alleged to be owned by any other Person.
3.9 LEGAL PROCEEDINGS AND CERTAIN LABOR MATTERS.
(a) LEGAL PROCEEDINGS. Except as set forth on Schedule 3.9, as of
the date hereof there is no Order or Action pending, or, to such Seller's
knowledge, threatened, against or affecting Company or any of its respective
properties or assets. Except as otherwise indicated on Schedule 3.9, no Order or
Action which is listed thereon if adversely determined is reasonably expected to
have a Material Adverse Effect.
(b) LABOR MATTERS. There is no organized labor strike, dispute,
slowdown or stoppage, or collective bargaining or unfair labor practice claim
(collectively, "LABOR MATTERS"), pending or to the best knowledge of Seller
threatened, against or affecting Company or the Business that if so determined
would reasonably be expected to have a Material Adverse Effect.
3.10 MINUTE BOOKS.
The minute books of Company accurately reflect all material actions
and proceedings taken to date by the respective shareholders and boards of
directors and committees of Company and its Subsidiary, and such minute books
contain true and complete copies of the charter documents of Company and all
related amendments. The stock record books of Company reflect accurately all
transactions in their respective capital stock of all classes.
3.11 PERMITS.
Except as set forth in Schedule 3.11, Company holds all Permits that
are required by any Governmental Entity to permit it to conduct its business as
now conducted, and all such Permits are valid and in full force and effect and
will remain so upon consummation of the transactions contemplated by this
Agreement in each case except where the failure to so hold or to be valid and in
full force and effect would not have a Material Adverse Effect. To Seller's
knowledge, no suspension, cancellation or
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termination of any of such Permits is threatened or imminent that could
reasonably be expected to have a Material Adverse Effect.
3.12 COMPLIANCE WITH LAW.
Company is organized and has conducted its business in accordance
with applicable Laws, and the forms, procedures and practices of Company are
in compliance with all such Laws, to the extent applicable, the failure to so
conduct or the violation of which could reasonably be expected to have a
Material Adverse Effect (it being agreed that "legal non-conforming" signs
shall not be in violation of Law for purposes of this Section 3.12). Seller
neither has any information nor is aware of any facts indicating that any
Governmental Authority in the Area has declared a moratorium on the
construction of outdoor advertising displays.
3.13 DIVIDENDS AND OTHER DISTRIBUTIONS.
Except as set forth on Schedule 3.13, there has been no dividend or
other distribution of assets or securities whether consisting of money, property
or any other thing of value, declared, issued or paid to or for the benefit of
Penn or the Seller subsequent to December 31, 1996.
3.14 EMPLOYEE BENEFITS.
(a) EMPLOYEE BENEFIT PLANS, COLLECTIVE BARGAINING AND EMPLOYEE
AGREEMENTS AND SIMILAR ARRANGEMENTS.
(1) Schedule 3.14 lists all employee benefit plans and
collective bargaining, employment or severance agreements or other similar
arrangements to which Penn or its Subsidiary is a party or by which either of
them is bound, legally or otherwise, including, without limitation, (a) any
profit-sharing, deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consulting, retirement, severance, welfare or incentive
plan, agreement or arrangement, (b) any plan, agreement or arrangement
providing for "fringe benefits" or perquisites to employees, officers,
directors or agents, including but not limited to benefits relating to
Company automobiles, clubs, vacation, child care, parenting, sabbatical, sick
leave, medical, dental, hospitalization, life insurance and other types of
insurance, (c) any employment agreement not terminable on 30 days (or less)
written notice, or (d) any other "employee benefit plan" (within the meaning
of Section 3(3) of ERISA).
(2) Seller has delivered to Buyer true and complete copies of
all documents and summary plan descriptions with respect to such plans,
agreements and arrangements, or summary descriptions of any such plans,
agreements or arrangements not otherwise in writing.
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(3) Penn and its Subsidiary are in material compliance with
the applicable provisions of ERISA (as amended through the date of this
Agreement), the regulations and published authorities thereunder, and all other
Laws applicable with respect to all such employee benefit plans, agreements and
arrangements. To the Penn Agreement Sellers' and the Seller's knowledge, there
are no Actions (other than routine claims for benefits) pending or threatened
against such plans or their assets, or arising out of such plans, agreements or
arrangements, and, to the Penn Agreement Sellers' and the Seller's knowledge, no
facts exist which could give rise to any such Actions that might have a material
adverse effect on such plans, agreements, or arrangements or a Material Adverse
Effect.
(4) Except as specified in Schedule 3.14, each of the plans,
agreements or arrangements can be terminated by Penn or by its Subsidiary within
a period of 30 days following the Closing Date, without payment of any
additional compensation or amount or the additional vesting or acceleration of
any such benefits.
(b) QUALIFIED PLANS.
(1) Schedule 3.14A itemizes all "employee pension benefit
plans" (within the meaning of Section 3(2) of ERISA) required to be scheduled
which are also stock bonus, pension or profit-sharing plans within the meaning
of Section 401(a) of the Code.
(2) Each such plan is qualified in form and operation under
Section 401(a) of the Code and each trust under each such plan is exempt from
tax under Section 501(a) of the Code. No event has occurred that will or could
give rise to disqualification or loss of tax-exempt status of any such plan or
trust under such sections. No event has occurred that will or could subject any
such plans to tax under Section 511 of the Code. No prohibited transaction
(within the meaning of Section 4975 of the Code) or party-in-interest
transaction (within the meaning of Section 406 of ERISA) that could give rise to
liability to the Penn, its Subsidiary or such plan has occurred with respect to
any of such plans.
(3) Seller has delivered to Buyer for each such plan copies
of the following documents: (i) the Form 5500 filed in the most recent plan
year, (ii) the most recent determination letter from the IRS, (iii) the
consolidated statement of assets and liabilities of such plan as of its most
recent valuation date, and (iv) the statement of changes in fund balance and in
financial position or the statement of changes in net assets available for
benefits under such plan for the most recently ended plan year. The financial
statements so delivered fairly present in all material respects the financial
condition and the results of operations of each such plan as of such dates.
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(c) TITLE IV PLANS
(1) Schedule 3.14B itemizes all plans required to be
scheduled which are also subject to Title IV of ERISA.
(2) With respect to each such plan in which Penn, its
Subsidiary or any trade or business (whether or not incorporated) that is a
member of a group of which Company is a member and which is under common control
within the meaning of Section 414 (b) and (c) of the Code ("ERISA AFFILIATE")
participates or has participated, (i) neither Penn not its Subsidiary nor any
ERISA Affiliate has withdrawn from such plan during a plan year in which it was
a "substantial employer" (as defined in Section 4001(a) (2) of ERISA), (ii)
neither Penn nor its Subsidiary nor any ERISA affiliate has filed a notice of
intent to terminate any such plan or adopted any amendment to treat any such
plan as terminated, (iii) the PBGC has not instituted proceedings to terminate
any such plan, (iv) no accumulated funding deficiency, whether or not waived,
exists with respect to any such plan on an accumulated benefit obligation basis,
and (v) no reportable event, as described in Section 4043 of ERISA, has occurred
with respect to any such plan.
(d) MULTI-EMPLOYER PLANS.
(1) Schedule 3.14C itemized all plans required to be
scheduled that are also multi-employer plans within the meaning of Section 3(37)
of ERISA.
(2) With respect to each such multi-employer plan in which
Penn, its Subsidiary or any ERISA Affiliate participates or has Participated,
neither Penn nor its Subsidiary not any ERISA Affiliate has withdrawn, partially
withdrawn, or to Seller's knowledge received any notice of any claim or demand
for withdrawal liability or partial withdrawal liability.
3.15 ENVIRONMENTAL MATTERS.
Except as set forth in Schedule 3.15, to either the Penn Agreement
Sellers' or Seller's knowledge, (a) Company is in compliance in all material
respects with all applicable federal, state, foreign and local laws and
regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient au, surface water, ground
water, land surface or sub surface strata (collectively, "ENVIRONMENTAL LAWS");
(b) Company has not received written notice and is not the subject of any
actions, causes of actions, claims,. investigations, demand or notices by any
person or entity alleging liability or non-compliance with any Environmental
Law; (c) there are no conditions existing which would reasonably be expected to
form the basis of a claim against Company for the violation or non-compliance
with any Environmental Law; and (d) there are no circumstances which would
reasonably be expected to prevent
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or interfere in the future with Company's compliance in all material respects
with all Environmental Laws.
3.16 CERTAIN INTERESTS.
Except as set forth on Schedule 3.16, as of the Closing Date, no
Affiliate of Seller or any Penn Agreement Seller, or to Seller's knowledge no
Affiliate of Penn or its Subsidiary nor any officer or director of any thereof,
nor Associate of any such individual, will have any material interest in any
property used in or pertaining to the Business; to Seller's knowledge no such
Person will be indebted or otherwise obligated to Company or its Subsidiary; and
to Seller's knowledge Company will not be indebted or otherwise obligated to any
such Person, except for amounts DUE UNDER NORMAL arrangements applicable to all
employees generally as to salary or reimbursement of ordinary business expenses
not unusual in amount or significance.
3.17 INTERCOMPANY TRANSACTIONS.
Except as set forth on Schedule 3.16, the consummation of the
transactions contemplated by this Agreement will not (either alone, or upon the
occurrence of any act or event, or with the lapse of tune, or both) result in
any payment arising or becoming due from Company or the successor or assign of
any thereof to Penn, Seller, any Penn Agreement Seller or any Affiliate thereof.
3.18 INSURANCE.
Schedule 3.18 lists all insurance policies and bonds that are material
to the Business. Neither Penn nor its Subsidiary is in default under any such
policy or bond.
3,19 NO BROKERS OR FINDERS.
Neither Seller nor Company has employed any broker, finder, consultant
or intermediary in connection with the transactions contemplated by this
Agreement who would be entitled to a broker's, finder's or similar fee or
commission in connection therewith or upon the consummation thereof.
3.20 ACCURACY OF INFORMATION.
To the knowledge of Seller or any Penn Agreement Sellers, none of the
written information supplied by or on behalf of Seller to any Person for
inclusion in, and included in, any document or application filed with any
Governmental Entity in connection with the transactions contemplated by this
Agreement contained any untrue statement of a material fact, or omitted any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
BUYER
Except as otherwise indicated in the Disclosure Schedules, Buyer
represents, warrants and agrees as follows, as of the date hereof:
4.1 ORGANIZATION AND RELATED MATTERS.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Illinois. Buyer has all necessary corporate power and
authority to carry on its business as now being conducted. Buyer has the
necessary corporate power and authority to execute. deliver and perform this
Agreement
4.2 AUTHORIZATION.
The execution, delivery and performance of this Agreement by Buyer,
and the transactions contemplated hereby, have been duly and validly authorized
by the Board of Directors of Buyer and by all other necessary corporate action
on the part of Buyer. This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally.
4.3 NO CONFLICTS; CONSENTS.
The execution, delivery and performance of this Agreement by Buyer,
and the performance of the transactions contemplated hereby, will not (a)
violate, accelerate, terminate or conflict with the provisions of, or constitute
a breach or default (whether upon lapse of tune and/or the occurrence of any act
or event or otherwise) under, the charter documents or by-laws of Buyer or any
of its Subsidiaries, or any Contract of Buyer, or any of its Subsidiaries, (b)
result In the imposition of any Encumbrance against any asset or property of
Buyer, or any of its Subsidiaries, or (c) violate or conflict with any Law,
order, judgment, injunction or decree applicable to Buyer, or any of its
Subsidiaries, where such violation would have a material adverse effect on the
business condition and results of operations of Buyer, or any of its
Subsidiaries, or the ability of Buyer, or any of its Subsidiaries, to perform
its obligations hereunder. No registrations. filings, applications, notices,
consents, approvals, orders, qualifications, authorizations or waivers are
required to be made, filed, given or obtained by the Buyer or any of its
Subsidiaries (or, by reason of facts pertaining to Buyer, or any of its
Subsidiaries or the Company, on the part of Buyer) with, to or from any Persons
(including Governmental Entities) in connection with the execution and delivery
of this Agreement or the
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consummation of the transactions contemplated hereby, except for filings
under the Hart-Scott-Rodino Act.
4.4 NO BROKERS OR FINDERS.
No agent, broker, finder or investment or commercial banker, or other
Person or firms engaged by or acting on behalf of Buyer or its Affiliates in
connection with the negotiation, execution or performance of this Agreement or
the transactions contemplated by this Agreement, is or will be entitled to any
broker's or finder's or similar fees or other commissions as a result of this
Agreement or such transactions.
4.5 LEGAL PROCEEDINGS.
There is no Order or Action pending or to Buyer's knowledge,
threatened against or affecting Buyer that individually or when aggregated with
one or more other Actions has had, or if adversely determined could have, or
might reasonably be expected to have a material adverse effect on Buyer's
ability to perform this Agreement or any other aspect of the transactions
contemplated by this Agreement.
4.6 INVESTMENT REPRESENTATION.
Buyer is acquiring the Purchased Stock from the Seller for Buyer's own
account, for investment purposes only and not with a view to or for sale in
connection with any distribution thereof in violation of the Securities Act.
4.7 ACCURACY OF INFORMATION.
To Buyer's knowledge, none of the written information supplied by or
on behalf of Buyer to any Person for inclusion in, and included in, any document
or application filed with any Governmental Entity in connection with the
transactions contemplated by this Agreement contained any untrue statement of a
material fact, or omitted any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. All documents required to be filed
by Buyer with any Governmental Entity in connection with this Agreement or the
transactions contemplated by this Agreement will comply in all material respects
with the provisions of applicable Law.
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ARTICLE V
ADDITIONAL CONTINUING COVENANTS
5.1 NONDISCLOSURE OF PROPRIETARY DATA.
After the Closing, Each of Seller and Lamar agrees with respect to
itself that neither it nor any of its representatives shall, at any time, make
use of, divulge or otherwise disclose, directly or indirectly, any trade secret
or other proprietary data (including, but not limited to, any customer list,
record or financial information constituting a trade secret) concerning the
business or policies of the Company that Seller or Lamar or any representative
of Seller or Lamar may have learned as a shareholder, employee, officer or
director of the Company unless such information has become generally available
and known to the public other than as a result of a prohibited disclosure by
Seller or Lamar or their representatives. Buyer acknowledges that it remains
subject to the Confidentiality Agreement dated September 11, 1996 between it and
Donaldson, Lufkin & Jenrette Securities Corporation, as the Company's
representatives.
5.2 TAX COOPERATION.
COMPANY TAXES. After the Closing, each of Guarantor, Lamar and Seller
agrees with respect to itself that it shall, and shall use its best efforts to
cause the Penn Sellers, Appleton Sellers, and their Affiliates to, cooperate
fully with Buyer and the Company in the preparation of all Tax Returns and shall
provide, or use its best efforts to cause to be provided at Buyer's sole cost
and expense, to Buyer and the Company any records and other information
requested by such parties in connection therewith as well as access to, and the
cooperation of, the auditors of such Guarantor, Lamar, Seller, Penn Sellers and
its Affiliates. Each of Guarantor, Lamar and Seller shall, and shall use its
best efforts to cause the Penn Sellers, Appleton Sellers, and their Affiliates
to, cooperate fully with Buyer and the Company in connection with any Tax
investigation, audit or other proceeding. Any information obtained pursuant to
this Section 5.2 or pursuant to any other Section hereof providing for the
sharing of information or the review of any Tax Return or other Schedule
relating to Taxes shall be subject to Section 8.10.
5.3 VESTING IN CERTAIN PENSION PLANS
As of the Closing, Penn or Seller shall cause each Company employee
who is an employee of the Company immediately prior to the Closing to become
fully vested in such employee's accrued benefit, if any, under the Penn
Advertising, Inc. Pension Plan for Salaried Employees and in such employee's
account balance under the Penn Advertising, Inc. Employee Savings Plan. Seller
represents that there are no employees or retirees of Company included in the
Penn Advertising, Inc. Pension Plan for Hourly Employees. The costs and expenses
of terminating any employee benefit or pension plan common to Penn and Company
shall be allocated between Penn and Company pro-rata
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based upon the gross amount of vested benefits due the employees of each of Penn
and Company as a result of such termination.
ARTICLE VI
ITEMS TO BE DELIVERED AT CLOSING
6.1 BY SELLER.
The Seller shall deliver to Buyer at Closing:
(a) OPINION OF COUNSEL. Buyer shall receive at the Closing,
dated the date thereof the opinion of Kean, Miller, Hawthorne, D'Armond,
McCowan & Jarman, L.L.P., special counsel to Seller, Lamar and Guarantor,
and the supplementary opinion of Satterlee, Stephens Burke & Burke, LLP,
special New York counsel to Seller, in a form and substance mutually
agreeable to Buyer and Seller.
(b) NON-COMPETITION. Buyer shall receive at the Closing partial
assignment (based upon geographical area) of all non-competition
agreements received by Guarantor pursuant to Section 9.2(e) of the Penn
Agreement.
(c) FIRPTA AFFIDAVIT. Seller shall deliver an affidavit to the
Buyer, dated as of the Closing Date, that is satisfactory to the Buyer
and which satisfies the requirements of Section 1445(b)(2) of the Code
and Treas. Reg. Section 1.1445-2(b)(2).
(d) CERTIFIED RESOLUTIONS. Each of Seller, Guarantor or Lamar
shall deliver to Buyer a copy of its corporate resolutions authorizing
this Agreement and the Transactions.
(e) RESIGNATIONS OF OFFICERS AND DIRECTORS. Seller shall deliver
to Buyer written resignations of the Officers and Directors of Company.
(f) SHARE CERTIFICATES. Seller shall deliver the share
certificates representing the Purchased Shares, appropriately endorsed or
with a blank stock power attached.
6.2 BY BUYER.
The Buyer shall deliver to Seller at Closing:
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(a) THE PURCHASE PRICE. The Buyer shall pay to Seller or its
assigns the Purchase Price in immediately available funds .
(b) OPINION OF COUNSEL. Seller shall receive at the Closing from
Skadden, Arps, Slate, Meagher & Flom, L.L.P. and Paul Simon, General Counsel to
Buyer reasonably acceptable to Seller, an opinion letter dated the Closing Date,
in form and substance mutually agreeable to Buyer and Seller.
(c) CERTIFIED RESOLUTIONS. Seller shall deliver to Buyer a copy of
its corporate resolutions authorizing this Agreement and the Transactions.
ARTICLE VII
INDEMNIFICATION
7.1 OBLIGATIONS OF SELLER.
Effective as of the Closing:
(a) Seller agrees to indemnify and hold harmless Buyer, Company,
and their respective directors, officers, employees, affiliates, agents and
assigns from and against any and all Losses of Buyer or Company, directly or
indirectly, as a result of, or based upon or arising from any material
inaccuracy in or breach or nonperformance of any of the representations or
warranties, covenants or agreements made by Seller in or pursuant to any
provision of this Agreement other than pursuant to Article III. In addition,
Guarantor, Lamar and Seller agree to indemnify and hold harmless Buyer and
the Company for Taxes imposed on the Company with respect to any Person other
than the Company pursuant to any agreement or Treas. Reg. Section 1.1502-6
(or any similar provision of state or local law)
(b) Seller and Lamar, severally and not jointly, to the extent
provided below, agree to indemnify and hold harmless, Buyer, Company, and their
respective directors, officers, employees, affiliates, agents and assigns from
and against any and all Losses of Buyer or Company, directly or indirectly, as a
result of, or based upon or arising from any material inaccuracy in or breach or
nonperformance of any of the representations or warranties made by Seller or
Lamar in this Agreement pursuant to Article III, EXCEPT THAT Seller's and
Lamar's obligation to indemnify and hold harmless Buyer, Company, and their
respective directors, officers, employees, affiliates, agents and assigns
pursuant to this Subsection shall: (i) be limited to the amount of Seller Net
Recovery for any claim of Buyer pursuant to this Subsection ("Seller Net
Recovery" being defined as the funds recovered by Lamar from the Penn Agreement
Sellers based upon a claim made by Buyer against Seller or Lamar pursuant to
this Subsection, net of all reasonable costs and expenses of Seller or Lamar
incurred in pursuing such claim, including without limitation reasonable
attorney's fees and costs); and (ii) (x) such Seller Net Recovery shall be paid
to Buyer pursuant to Section 7.5 below, to the extent that
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such Section 7.5 is applicable; or (y) such Seller Net Recovery shall be paid to
Buyer within 5 days of receipt by Seller if Section 7.5 is not applicable.
(c) Notwithstanding anything to the contrary in this Agreement,
Seller, Lamar, nor Guarantor make no warranty or representation of any nature or
kind concerning any Advertiser Effect and the same do not have any obligation to
indemnify Buyer concerning any Advertiser Effect, PROVIDED, HOWEVER, this
sub-section is not intended to, and does not, affect in any way any warranty or
representation made to Lamar by any Penn Agreement Seller in the Penn Agreement,
the benefit of which is passed through herein to Buyer pursuant to the
representations and warranties made in Article III and the indemnity provisions
of this Article.
7.2 OBLIGATIONS OF BUYER.
Buyer agrees to indemnify and hold harmless Seller from and against
any Losses of Seller and its respective directors, officers, employers,
affiliates, partners, agents and assigns, directly or indirectly, as a result
of, or based upon or arising from (a) any material inaccuracy in or breach or
nonperformance of any of the representations, warranties, covenants or
agreements made by Buyer in this Agreement; or (b) any Order or Action arising
out of operation of the Business on or after the Closing Date.
7.3 PROCEDURE.
(a) NOTICE OF THIRD PARTY CLAIMS BY BUYER. If Buyer should seek
from Seller or Lamar indemnification of any Loss or potential Loss arising from
a claim asserted by a third party (including but not limited to a notice of Tax
audit or request to waive or extend a statute of limitations applicable to any
Tax), Buyer shall give written notice to the Seller or Lamar, as the case may
be. Written notice to the Indemnifying Party of the existence of a third-party
Indemnifiable Claim shall be given by the Indemnified Party within 30 days after
its receipt of a written assertion of liability from the third party, including
in the case of tax matters, written notice of any tax audit that might result in
such a claim.
(b) NOTICE OF THIRD PARTY CLAIMS BY SELLER. If Seller should
seek from Buyer indemnification of any Loss or potential Loss arising from a
claim asserted by a third party (including but not limited to a notice of Tax
audit or request to waive or extend a statute of limitations applicable to
any Tax), Seller shall give written notice to the Buyer. Written notice to
the Indemnifying Party of the existence of a third-party Indemnifiable Claim
shall be given by the Indemnified Party within 30 days after its receipt of a
written assertion of liability from the third party, including in the case of
tax matters, written notice of any tax audit that might result in such a
claim.
(c) DEFENSE OF BUYER. If Buyer's claim for indemnification by
Seller is made pursuant to Section 7.1(a) above, if Buyer so requests, Seller,
as an
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Indemnifying Party hereunder, shall promptly assume the costs of defense of
an Indemnifiable Claim. The Indemnifying Party shall retain experienced
counsel reasonably satisfactory to the Indemnified Party and thereafter shall
control defense of the claim. If the Indemnifying Party does not assume such
defense or the Indemnified Party has the right to control the defense of the
Indemnifiable Claim, the Indemnified Party may compromise or settle the
Indemnifiable Claim on behalf of and for the account and risk of the
Indemnifying Party with the prior written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. In all cases, the party
without the right to control the defense of the Indemnifiable Claim may
participate in the defense at its own expense.
(d) DEFENSE OF SELLER. If Seller so requests, Buyer, as an
Indemnifying Party hereunder, shall promptly assume the costs of defense of an
Indemnifiable Claim. The Indemnifying Party shall retain experienced counsel
reasonably satisfactory to the Indemnified Party and thereafter shall control
defense of the claim. If the Indemnifying Party does not assume such defense or
the Indemnified Party has the right to control the defense of the Indemnifiable
Claim, the Indemnified Party may compromise or settle the Indemnifiable Claim on
behalf of and for the account and risk of the Indemnifying Party with the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. In all cases, the party without the right to control the
defense of the Indemnifiable Claim may participate in the defense at its own
expense.
(e) SELLER'S AND LAMAR'S OBLIGATION TO PURSUE CERTAIN CLAIMS. To
the extent that Buyer seeks indemnification from Seller or Lamar pursuant to
Subsection 7.1(b) above, Seller or Lamar shall promptly, and in no event more
than five (5) business days, following receipt of written notice of such
claim by Buyer, pursue its rights against the Penn Agreement Sellers with
respect to corresponding claims of Lamar against the Penn Agreement Sellers
and the Escrow Fund at the direction of and for the account of Buyer. Seller
or Lamar shall use its best efforts to obtain recovery upon such claim. If
Seller or Lamar fails to promptly pursue such corresponding claims pursuant
to this subsection, Seller shall indemnify Buyer with respect to such claims
pursuant to subsection 7.1(a) hereof. Seller or Lamar shall pay the
reasonable costs of pursuing such claim against the Penn Agreement Sellers
and shall provide Buyer with details of such costs and expenses, including
receipts and invoices. Seller or Lamar shall seek prior approval from Buyer,
which approval shall not be unreasonably withheld, of any costs or expenses
which are anticipated to exceed $10,000.00. Seller and Buyer shall consult on
the decisions concerning such claims of Lamar against the Penn Agreement
Sellers that are based upon a claim by Buyer against Seller or Lamar,
PROVIDED, HOWEVER, all decisions concerning such claims of Lamar against the
Penn Agreement Sellers shall be made ultimately in the reasonable discretion
of Seller or Lamar. If at any time Seller or Lamar is unwilling to continue
to pursue any claim against the Penn Agreement Sellers that is based upon a
claim against it by Buyer, and Buyer wishes Seller or Lamar to continue to
pursue such claim, Seller or Lamar shall continue to pursue such claim
against the Penn Agreement Sellers, PROVIDED, HOWEVER, Buyer shall have the
obligation
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to advance to Seller or Lamar funds sufficient to cover all of Seller or
Lamar's reasonable and pre-approved costs and expenses, including without
limitation reasonable attorney's fees and costs which if the Buyer so elects
shall be counsel chosen by the Buyer, of continuing to pursue such claim, as
such costs and expenses are incurred. To the extent there is a recovery from
the Penn Agreement Sellers on such claim as Buyer has advanced costs, Buyer,
Seller and Lamar shall recover such costs paid on account of such claim
pro-rata from the amount recovered prior to any distribution of the net
recovery.
(f) SETTLEMENT LIMITATIONS ON CERTAIN CLAIMS. Notwithstanding
anything in this Section 7.3 to the contrary, neither Buyer, Seller nor Lamar
shall, without the written consent of the other Party, settle or compromise
any Indemnifiable Claim of Seller or of Buyer pursuant to Section 7.1 or 7.2
above or permit a default or consent to entry of any judgment unless the
claimant and such party provide to such other Party an unqualified release
from all liability in respect of such Indemnifiable Claim. Notwithstanding
the foregoing, if a settlement offer solely for money damages is made by the
applicable third party claimant, and the Indemnifying Party notifies the
Indemnified Party in writing of the Indemnifying Party's willingness to
accept the settlement offer and, subject to the limitations of Section 7.5,
pay the amount called for by such offer, and the Indemnified Party declines
to accept such offer, the Indemnified Party may continue to contest such
Indemnifiable Claim, free of any participation by the Indemnifying Party, and
the amount of any ultimate liability with respect to such Indemnifiable Claim
that the Indemnifying Party has an obligation to pay hereunder shall be
limited to the lesser of (A) the amount of the settlement offer that the
Indemnified Party declined to accept plus the Losses of the Indemnified Party
relating to such Indemnifiable Claim through the date of its rejection of the
settlement offer or (B) the aggregate Losses of the Indemnified Party with
respect to such Indemnifiable Claim. If the Indemnifying Party makes any
payment on any Indemnifiable Claim, the Indemnifying Party shall be
subrogated, to the extent of such payment, to all rights and remedies of the
Indemnified Party to any insurance benefits or other claims of the
Indemnified Party with respect to such Indemnifiable Claim.
(g) TAX MATTERS. Notwithstanding anything to the contrary in
paragraphs (c) through (f) above, the provisions of Sections 5.2, and 7.3(a),
7.3(b) and this Section 7.3(g) through 7.3(m) below shall govern all Tax
matters relating to Indemnifiable Claims or Tax matters relating to the
Business, Seller, Buyer or this transaction
(h) TAX AUDITS. (i) The Seller or its assigns, have the sole right
to represent Buyer's interest in any audit or administrative or court
proceeding relating to income, sales, use or value added Taxes, whether
imposed on the Company, or any holder of the Penn Shares, with respect to the
business, operations or activities of the Company during periods (or portions
thereof) ending on or before the Closing Date ("PRE-CLOSING TAXES) and to
employ counsel of its choice at its expense.
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Notwithstanding the foregoing, Seller, Lamar, or their assigns shall not be
entitled to settle, either administratively or after the commencement of
litigation, any claim for income, sales, use or value added Taxes which would
materially adversely affect the liability for income, sales, use or value
added Taxes of Buyer for any period (or portion thereof) beginning after the
Closing Date without the prior written consent of Buyer. Such consent shall
not be unreasonably withheld, and shall not he necessary to the extent that
(A) the settlement is consistent with the positions previously taken by the
Company or (B) Seller has agreed to indemnify Buyer against the effects of
any such settlement.
(ii) To the extent permitted by the Penn Agreement, Buyer
shall have the right to represent the interest of the Company in any audit or
administrative or court proceeding relating to Taxes other than Pre-Closing
Taxes. Notwithstanding the foregoing, Buyer shall not be entitled to settle,
either administratively or after the commencement of litigation, any claim
for Taxes which could adversely affect Seller's, Lamar's, Lamar Advertising
of Penn, Inc.'s, any Penn Seller's or Appleton Seller's liability for
Pre-Closing Taxes or Pre-Closing Appleton Taxes or its indemnification
obligations under this Agreement without the prior consent of the Seller.
Such consent shall not be unreasonably withheld, and shall not be necessary
to the extent that (A) the settlement is consistent with the positions
previously taken by the Company, as the case may be or (B) Buyer has agreed
to indemnify the Seller against the effects of any such settlement.
(iii) Seller shall have no liability under this Agreement for,
and Buyer will indemnify Seller against any liability for any Tax of any Penn
Agreement of Seller, the payment of which was made without Seller's prior
written consent, which may not be unreasonably withheld, or any settlements
effected without the consent of Seller, as required by paragraph (ii), or
resulting from any claim, suit, action, litigation or proceeding in which the
Seller or its assigns were not permitted an opportunity to assume the defense
as required under paragraph (i).
(i) TAX COVENANTS. Buyer covenants that it will not, and will not
permit the Company to, (i) make or change any Tax election, or amend any Tax
Return or take any Tax position on any Tax Return filed by or on behalf of
the Company, take any action or omit to take any action that results in any
increased Tax liability of Seller, Lamar, Lamar Advertising of Penn, Inc.,
the Penn Agreement Sellers, Penn, or Appleton with respect to any Tax period
(or portion thereof) ending on or before the close of business on the Closing
Date.
(j) REFUNDS. (i) Any refund of Taxes with respect to the business,
operations or activities of the Company, whether received before or after the
Closing, pertaining to periods (or portions thereof) ending on or before the
Closing, except to the extent such refund is an asset on the books of the
Company on the Closing Date, shall be paid to the Seller upon receipt by
Buyer or its Affiliate, after deducting any Losses for Taxes with respect to
the business, operations or activities of the Company during
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periods (or portions thereof) ending on or before the Closing Date to the
extent a claim for indemnification therefor would be available under Section
7.1 hereof but for the limitations contained in Section 7.5(b) hereof. Buyer
agrees that, upon the reasonable request and at the sole expense of the
Seller, Buyer shall file an amended return or a claim for refund relating to
such pre-Closing period Taxes.
(k) TAX BENEFITS. (i) If any adjustment shall be made to any Tax
Return of the Company relating to any taxable period of the Company ending
prior to or on or including the Closing Date which results in any Tax
detriment to any Penn Agreement Seller and results in any deduction,
exclusion from income or other allowance (a "TAX BENEFIT") to Buyer or any of
its Affiliates a taxable period (or portion thereof) beginning after the
Closing Date, Buyer shall pay to the affected Penn Agreement Sellers the
amount of the Tax reduction attributable to such Tax Benefit at such time or
times as, and to the extent that, the Company or Buyer realizes such Tax
reduction.
(ii) If any adjustment shall be made to any Tax Return relating to
Buyer for any taxable period ending after the Closing Date which results in
any Tax detriment to Buyer or any of its Affiliates and results in any Tax
Benefit to Seller Guarantor, Lamar, Penn or the Penn Agreement Sellers for
any taxable period of the Company ending on or prior to the Closing Date,
the Seller, Lamar, Guarantor and Penn shall (to the extent that they
received such Tax Benefit) and the Seller, Guarantor, Lamar and Penn
shall use its best efforts to cause the Seller, Guarantor, Lamar or Penn
Agreement Sellers, as the case may be, to pay to Buyer the amount of the Tax
reduction attributable to such Tax Benefit at such time or times as and to
the extent that Guarantor, Seller or Lamar, such Penn Agreement Seller, or
Penn realize such Tax reduction.
(l) RETURNS AND REPORTS. (i) Seller or Lamar shall or shall use its
best efforts to cause the Seller Representatives to cause to be filed (or
provided to Buyer for filing, if appropriate) when due all Tax Returns with
respect to income Taxes that are required to be filed by or with respect to
the Company for taxable periods ending on or before the Closing Date. Seller
or Lamar shall use its best efforts to insure that without Buyer's consent,
no position may be taken in such Tax Returns inconsistent with prior reporting
practice if such position could increase the Buyer's Tax liabilities for any
period after the Closing Date.
(ii) Subject to paragraph (h) above, Buyer shall file or cause to
be filed when due all other Tax Returns that are required to be filed by or
with respect to the Company after the Closing Date. The Seller and the Seller
Representatives shall have the right to approve (which approval shall not
unreasonably be withheld) such Tax Return prior to the filing thereof to the
extent it could affect any Penn Agreement Sellers' or Seller's liability for
Pre-Closing Taxes or its indemnification obligations under this Agreement.
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(m) TAX ADJUSTMENTS. Any amounts payable by the Indemnifying Party
to or on behalf of an Indemnified Party in respect of a Loss shall be
adjusted as follows:
(i) If such Indemnified Party is liable for any additional Taxes
as a result of the payment of amounts in respect of an Indemnifiable Claim,
the Indemnifying Party will pay to the Indemnified Party in addition to
such amounts in respect of the Loss within 10 days after being notified by
the Indemnified Party of the payment of such liability (x) an amount equal
to such additional Taxes (the "TAX REIMBURSEMENT AMOUNT") plus (y) any
additional amounts required to pay additional Taxes imposed with respect to
the Tax Reimbursement Amount and with respect to amounts payable under this
clause (y), with the result that the Indemnified Party shall have received
from the Indemnifying Party, net of the payment of Taxes, an amount equal
to the Loss.
(ii) The Indemnified Party shall reimburse the Indemnifying
Party an amount equal to the net reduction in any year in the liability for
Taxes (that are based upon or measured by income) of the Indemnified Party
or any member of a consolidated or combined tax group of which the
Indemnified Party is, or was at any time, part, which reduction is actually
realized with respect to any period after the Closing Date and which
reduction would not have been realized but for the amounts paid (or any
audit adjustment or deficiency with respect thereto, if applicable) in
respect of a Loss, or amounts paid by the Indemnified Party pursuant to
this paragraph (a "NET TAX BENEFIT"). The amount of any Net Tax Benefit
shall be paid not later than 15 days after the date on which such Net Tax
Benefit shall be realized. For purposes of this clause (ii), the Net Tax
Benefit shall be deemed to be actually realized on the date on which such
Net Tax Benefit is used to compute an obligation to pay installments of
estimated tax or, if earlier, reported earnings; PROVIDED, HOWEVER, that if
the amount of any Net Tax Benefit is subsequently affected by reason of any
event or events, including, without limitation, any payment of Taxes by
such Indemnified Party with respect to the loss of such Net Tax Benefit
upon audit or litigation, appropriate adjustments and payments to take into
account the increase or decrease in such Net Tax Benefit shall be made
between the Indemnified Party and the Indemnifying Party within 15 days
after such event or events. Any expenses associated with the realization of
a Net Tax benefit or any contest or proceeding with respect to a Net Tax
Benefit shall be deemed to reduce such Net Tax Benefit. Buyer agrees to
provide Seller or its designated representatives with such assistance and
such documents and records reasonably requested by them that are relevant
to their ability to determine whether a Net Tax Benefit has been realized,
including but not limited to copies of any Tax Returns, estimated tax
payments, schedules, and related supporting documents.
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7.4 SURVIVAL.
The representations and warranties and agreements contained in or
made pursuant to this Agreement shall expire on the first anniversary of the
Closing, except that (i) the representations and warranties contained in
Sections 2.1 [Organization], 2.2 [Authorization], 2.4
[Title to Purchased Stock], 2.5 [Company Debt], 2.6 [No Brokers or Finders],
3.1 [Organization and Good Standing], 3.2 [Company Stock], 4.1
[Organization and Related Matters], and 4.2 [Authorization] shall survive the
Closing and shall remain in full force and effect indefinitely, (ii) the
representations and warranties contained in Section 3.5
[Taxes and Tax Returns] shall survive the Closing and remain in full force
and effect for the period of the applicable statute of limitations with
respect to such claims, (iii) the agreements contained in Article VI, and in
Sections 7.3(g)-(m) shall survive the Closing and remain in full force and
effect indefinitely and (iv) if a claim or notice is given under this Article
VII with respect to any representation or warranty or agreement prior to the
applicable expiration date set forth in this Section 7.4, such representation
or warranty or agreement shall continue indefinitely only for the purposes of
such claim until such claim is finally resolved. The indemnification set
forth in this Article VII shall survive the Closing and shall remain in
effect for a period of one year after the Closing Date, except for any
indemnification for a breach of a representation or warranty or agreement
which survives indefinitely in accordance with the terms of this Section 7.4.
Any matter as to which a claim has been asserted by notice to the other party
that is pending or unresolved at the end of any applicable limitation period
shall continue to be covered by this Article VII notwithstanding any
applicable statute of limitations (which the parties hereby waive) until such
matter is finally terminated or otherwise resolved by the parties under this
Agreement or by a court of competent jurisdiction and any amounts payable
hereunder are finally determined and paid.
7.5 LIMITATIONS ON INDEMNIFICATION.
(a) DOLLAR LIMITATION. Notwithstanding anything to the contrary
herein, in no event shall the aggregate amount payable by Seller or Lamar
under this Article VII exceed an amount equal to the Purchase Price.
(b) BREACH REGARDING BUYER. Buyer shall not be required to
indemnify any other Person under or pursuant to Section 7.2 unless the
aggregate of all amounts for which indemnity would otherwise be payable by
Buyer under Section 7.2 exceeds $25,000 and, in such event, the Indemnifying
Party shall be responsible only for the amount in excess of such $25,000.
7.6 SHARING OF AMOUNTS RECOVERED FROM WORKING CAPITAL AND CLAIMS
ESCROW ACCOUNT.
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Any amount paid to Seller or Lamar by the Penn Agreement Sellers
from the Escrow Accounts pursuant to Article XI of the Penn Agreement shall
be shared by Buyer, Seller and Lamar according to this Section.
(a) LIMITATION ON CLAIMS REGARDING COMPANY. Claims made by Buyer
against Seller or Lamar pursuant to Section 7.1(b) which result in claims of
Lamar against the Penn Agreement Sellers that are permissible and limited
pursuant to Section 11.5(b) of the Penn Agreement are referred to hereinafter
as "Buyer 11.5(b) Claims." Claims made by Lamar against the Penn Agreement
Sellers that are permissible and limited pursuant to Section 11.5(b)) of the
Penn Agreement and are unrelated to any claim of Buyer are referred to
hereinafter as "Seller 11.5(b) Claims." Notwithstanding anything to the
contrary herein, no payment shall be required to be made to Buyer by Seller
or Lamar with respect to Buyer 11.5(b) Claims if: (i) Buyer 11.5(b) Claims do
not exceed $187,500, AND (ii) the sum of Buyer 11.5(b) Claims and Seller
11.5(b) Claims does not exceed $750,000.
(b) AMOUNTS RECOVERABLE BY BUYER. If Seller or Lamar receives funds
from the Working Capital and Claims Escrow Account as a result of any claim
against the Penn Sellers, and if such amount received by Seller or Lamar
includes any amount that is the result of one or more Buyer 11.5(b) Claims,
Seller or Lamar shall immediately pay to Buyer (i) the amount of the included
Buyer 11.5(b) Claims less $187,500, up to the aggregate amount of $750,000
for all of Buyer 11.5(b) Claims recovered from the Working Capital and Claims
Escrow Account; less (ii) the reasonable costs and expenses incurred by
Seller or Lamar in collecting such Buyer 11.5(b) claims as provided herein
from the Penn Agreement Sellers, including without limitation reasonable
attorney's fees and costs.
(c) AMOUNTS RECOVERABLE BY SELLER OR LAMAR. If Seller or Lamar
receives funds from the Working Capital and Claims Escrow Account as a result
of any Seller 11.5(b) Claim, Seller or Lamar shall retain without any
obligation to Buyer (i) the amount of its included 11.5(b) Claims less the
aggregate sum of $562,500, up to the aggregate amount of $2,250,000 for all
Seller 11.5(b) Claims recovered from the Working Capital and Claims Escrow
Account.
(d) ESCROW OF ADDITIONAL AMOUNT RECOVERABLE BY BUYER. To the extent
that total Buyer 11.5(b) Claims are in excess of $937,5OO, and as a result of
such excess Buyer 11.5(b) Claims funds are recovered by Seller or Lamar from
the Working Capital and Claims Escrow Account, (recognizing that Seller's or
Lamar's right to retain any funds recovered pursuant to Subsection (c) above
shall be superior to any right granted Buyer pursuant to this Subsection)
such funds, net of Seller's or Lamar's reasonable costs and expenses incurred
by Seller or Lamar in collecting such Buyer 11.5(b), as provided herein,
claims from the Penn Agreement Sellers, including without limitation
reasonable attorney's fees and costs, shall be promptly paid to Trust Company
of Louisiana, as escrow agent for Buyer, Seller and Lamar pursuant to an
escrow agreement substantially
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in the form of Exhibit D attached hereto by and among Buyer, Seller, Lamar
and such escrow agent. (hereinafter the escrow account established pursuant
to this provision is referred to as the Secondary Escrow Account and the
escrow agent is referred to as the "Secondary Escrow Agent"). The term of
such escrow arrangement shall extend twenty days past the term of the Escrow
Agreement.
(e) ESCROW OF ADDITIONAL AMOUNTS RECOVERABLE BY SELLER. To the
extent total Seller 11.5(b) Claims are in excess of $2,812,500 and as a
result of such excess Seller 11.5(b) Claims funds are recovered by Seller or
Lamar from the Working Capital and Claims Escrow Account (recognizing that
Buyer's right to be paid any funds recovered pursuant to Subsection (b) above
shall be superior to any right granted Seller or Lamar pursuant to this
Subsection), such funds, net of Seller's or Lamar's reasonable costs and
expenses incurred by Seller or Lamar in collecting such Buyer 11.5(b) claims
from the Penn Agreement Sellers, including without limitation reasonable
attorney's fees and costs, shall be promptly paid to the Secondary Escrow
Agent for deposit in the Secondary Escrow Account.
(f) PAYMENTS FROM ESCROW. If, after the Secondary Escrow Account has
been established, should Buyer determine that it has additional Buyer 11.5(b)
Claims, Buyer shall make such claims and Seller or Lamar shall take such
actions as are provided for in this Article VII. To the extent that the
Working Capital and Claims Escrow Account has not been exhausted, Seller or
Lamar shall pursue Buyer 11.5(b) Claims and Seller 11.5(b) Claims against the
Penn Agreement Sellers and the Working Capital and Claims Escrow Account as
provided for in this Article VII. To the extent that the Working Capital and
Claims Escrow Account has been exhausted by the combined claims of Buyer,
Seller and Lamar pursuant to this Agreement and/or the Penn Agreement, Buyer,
Seller, or Lamar shall have the right to be paid any such additional
reasonable and valid Buyer 11.5(b) Claims or Seller 11.5(b) Claims made in
good faith from the funds in the Secondary Escrow Account, (i) for Buyer up
to the positive difference between $750,000 and the amount collected by
Seller and Lamar on behalf of Buyer from the Working Capital and Claims
Escrow Account pursuant to Subsection 7.6(b) hereof; or (ii) for Seller and
Lamar combined, up to the positive difference between $2,250,000 and the
amount collected by Seller and Lamar from the Working Capital and Claims
Escrow Account pursuant to Subsection 7.6(c) hereof.
(g) FINAL SETTLEMENT. At the expiration of the Secondary Escrow
Account agreement, the amount remaining in the Secondary Escrow Account shall
be distributed to the party whose 11.5(b) claim resulted in the payment from
the Working Capital and Claims Escrow Account to the Secondary Escrow
Account, PROVIDED HOWEVER, if there are not enough funds in the Secondary
Escrow Account to satisfy the established and paid 11.5(b) Claims of both
Buyer, Seller and Lamar, the remaining funds shall be shared by Buyer, Seller
and Lamar in the ratio of their respective established and paid 11.5(b)
claims that were deposited into the Secondary Escrow Account.
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7.7 EXCLUSIVE REMEDY.
Notwithstanding anything to the contrary herein, the indemnity
provided in this Article VII, as it relates to a breach of a representation
or warranty or a failure to perform any covenant or agreement in any case
contained in this Agreement, shall be the exclusive contractual remedy with
respect to matters addressed by such covenant, agreement, representation or
warranty other than any rights to specific performance available for a breach
of a covenant hereunder.
7.8 ACTUAL DAMAGES.
Any Indemnifiable Claim, whether with respect to any breach or
nonperformance by either party of a representation, warranty, covenant or
agreement or otherwise, shall be limited to the amount of actual Losses
sustained by the Indemnified Party by reason of such breach or nonperformance
and shall be net of any insurance proceeds received from insurance companies,
including affiliated insurance companies. Notwithstanding anything to the
contrary herein, no party (or its Affiliates) shall, in any event, be liable
to any other party (or its Affiliates) for any punitive, incidental or
consequential damages, including, but not limited to, loss of revenue or
income, or loss of business reputation or opportunity relating to the breach
or alleged breach of this Agreement.
7.9 TREATMENT OF PAYMENTS.
All payments made pursuant to this Article VII shall be treated as
adjustments to the Purchase Price for the Purchased Stock.
7.10 ASSIGNMENT OF CLAIM FOR BREACH. To the extent allowed by law
and the Penn Purchase Agreement, Seller and Lamar shall partially assign any
claim or Action against the Penn Agreement Sellers for breach of any
warranty, representation, covenant, or indemnity to Buyer at the time such
claim or Action arises, to the extent such claim or Action relates to the
Company or the Purchased Stock.
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ARTICLE VIII
GENERAL
8.1 GUARANTY.
In consideration of the benefits to Seller and Lamar under this
Agreement, Guarantor does hereby guarantee, jointly and severally, with
Seller and Lamar, all of the agreements (including but not limited to
agreements to indemnify), representations, warranties, covenants of Seller or
of Lamar under this Agreement and under all documents to be executed pursuant
to this Agreement.
8.2 AMENDMENTS; WAIVERS.
This Agreement and any schedule or exhibit attached hereto may be
amended only by agreement in writing of all parties. Except as otherwise
provided herein, no waiver of any provision nor consent to any exception to
the terms of this Agreement shall be effective unless in writing and signed
by the party to be bound and then only to the specific purpose, extent and
instance so provided. No failure on the part of any party to exercise or
delay in exercising any right hereunder shall be deemed a waiver thereof, nor
shall any single or partial exercise preclude any further or over exercise of
such or any other right.
8.3 SCHEDULES; EXHIBITS; INTEGRATION.
Each schedule and exhibit delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of this Agreement
and is deemed incorporated herein by this reference, although schedules need
not be attached to each copy of this Agreement. This Agreement, together with
such schedules and exhibits, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the parties in connection therewith.
8.4 BEST EFFORTS; FURTHER ASSURANCES.
(a) STANDARD. Each party will use its best efforts to cause all
conditions to its obligations to be timely satisfied. The parties shall
cooperate with each other in such actions and in securing requisite
Approvals. Each party shall deliver such further certificates, agreements and
other documents and take such other actions as the other party may reasonably
request to consummate or implement the transactions contemplated hereby or to
evidence such events or matters.
(b) LIMITATION. As used in this Agreement, the term "best efforts"
shall not mean efforts which require the performing party to do any act that
is unreasonable under the circumstances, to make any capital contribution or
to expend any
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funds other than reasonable out-of-pocket expenses incurred in satisfying its
obligations hereunder, including but not limited to the fees, expenses and
disbursements of its accountants, actuaries, counsel and other professionals.
8.5 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to conflicts of law
principles.
8.6 NO ASSIGNMENT.
Neither this Agreement nor any rights or obligations under it are
assignable except that: (i) Buyer may assign its rights hereunder (including
but not limited to its rights under Article VII ) to any wholly-owned
subsidiary of Buyer and (ii) Seller may assign its rights here under to any
of its Affiliates. Buyer shall remain liable to Seller and/or to Penn for the
payment of the Purchase Price and other obligations of Buyer hereunder
notwithstanding a permitted assignment, and Seller shall remain liable to
Buyer for its obligations to Buyer hereunder notwithstanding a permitted
assignment.
8.7 HEADINGS.
The descriptive headings of the Articles, Sections and Subsections of
this Agreement are for convenience only and do not constitute a part of this
Agreement.
8.8 COUNTERPARTS.
This Agreement and any amendment hereto or any other agreement (or
document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document)
and shall become effective (unless otherwise provided therein) when one or
more counterparts have been signed by each party and delivered to the other
party.
8.9 PUBLICITY AND REPORTS.
Seller and Buyer shall coordinate all publicity relating to the
transactions contemplated by this Agreement and no party shall issue any
press release, publicity statement or other public notice relating to this
Agreement, or the transactions contemplated by this Agreement, without
consulting with the other party, and in no event may any such public
disclosure refer to the purchase price payable to Seller hereunder, except to
the extent that independent legal counsel to Seller or Buyer, as the case may
be, shall deliver a written opinion to the other party that a particular
action is required by applicable law.
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8.10 CONFIDENTIALITY.
All information disclosed in writing, whether before or after the
date hereof, in connection with the transactions contemplated by, or the
discussions and negotiations preceding, this Agreement to any other party (or
its representatives) shall be kept confidential by such other party and its
representatives and shall nor be used by any such Persons other than as
contemplated by this Agreement, except to the extent that (i) such
information was known by the recipient when received, (ii) such information
is or hereafter becomes lawfully obtainable from other sources, (iii) such
information is necessary or appropriate to disclose to a Governmental Entity
having jurisdiction over the parties, (iv) may otherwise be required by law
or (v) such duty as to confidentiality is waived in writing by the other
party. If this Agreement is terminated, each party shall use all reasonable
efforts to return upon written request from the other party all documents
(and reproductions thereof) received by it or its representatives from such
other party (and, in the case of reproductions, all such reproductions made
by the receiving party) that include information not within the exceptions
contained in the first sentence of this Section 8.10, unless the recipients
provide assurances reasonably satisfactory to the requesting party that such
documents have been destroyed.
8.11 PARTIES IN INTEREST.
This Agreement shall be binding upon and inure to the benefit of
each party, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement is intended
to relieve or discharge the obligation of any third person to (or to confer
any right of subrogation or action over against) any party to this Agreement.
8.12 PERFORMANCE BY SUBSIDIARY.
Each party agrees to cause its subsidiaries to comply with any
obligations hereunder relating to such subsidiaries and to cause its
subsidiaries to take any other action which may be necessary or reasonably
requested by the other party in order to consummate the transactions
contemplated by this Agreement.
8.13 NOTICES AND PAYMENT INSTRUCTIONS
Any notice or other communication hereunder must be given in writing
and (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism provided that any notice so given is also mailed
as provided in clause (c) or (c) mailed by certified or registered mail,
postage prepaid), receipt requested (A) if to Buyer to Universal Outdoor,
Inc., 321 N. Clark Street, Suite 1010, Chicago, IL 60610, ATTENTION: Mr.
Brian Clingen, with a copy to Skadden, Arps, Meagher, Slate & Flom LLP, 919
Third Avenue, New York, NY 10022, ATTENTION: Howard A. Ellin; (B) if to
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Seller to 5551 Corporate Boulevard, Suite 2A, Baton Rouge, LA 70808,
ATTENTION: Keith A. Istre, with a copy to Kean, Miller, Hawthorne, D'Armond,
McCowan & Jarman. L.L.P., One American Place, 22nd Floor, Baton Rouge, LA
70825, ATTENTION: Ben R Miller, Jr.; (C) if to Lamar to 5551 Corporate
Boulevard, Suite 2A, Baton Rouge, LA 70808, ATTENTION: Keith A. Istre, with a
copy to Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P., One
American Place, 22nd Floor, Baton Rouge, LA 70825, ATTENTION: Ben R. Miller,
Jr., and (D) if to Guarantor to 5551 Corporate Boulevard, Suite 2A, Baton
Rouge, LA 70808, ATTENTION: Keith A. Istre, with a copy to Kean, Miller,
Hawthorne, D'Armond, McCowan & Jarman, L.L.P., One American Place, 22nd
Floor, Baton Rouge, LA 70825, ATTENTION: Ben R. Miller, Jr.; or, in each
case, to such other address or to such other person as either party shall
have last designated by such notice to the other party. Each such notice or
other communication shall be effective (i) if given by telecommunication,
when transmitted to the applicable number so specified in (or pursuant to)
this Section 8.13 and an appropriate answer-back is received, (ii) if given
by mail, three days after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when actually received at such address.
With respect to any payments to be made hereunder to any party, such
payment shall be made by wire transfer in immediately available funds to the
account of such party designated in writing to the other parties hereto.
8.14 EXPENSES.
Seller and Buyer shall each pay their own expenses incident to the
negotiation, preparation and performance of this Agreement and the
transactions contemplated hereby, including but not limited to the fees,
expenses and disbursements of their respective investment bankers,
accountants and counsel.
8.15 LITIGATION.
All litigation relating to or arising under or in connection with
this Agreement shall be brought only in the federal or state courts located
in the State of Delaware and County of Wilmington, which shall have exclusive
jurisdiction to resolve any disputes with respect to this Agreement, with
each party irrevocably consenting to the jurisdiction thereof for any
actions, suits or proceedings arising out of or relating to this Agreement.
The parties hereto irrevocably waive trial by jury. Subject to Sections 7.5
and 7.7, in the event of any breach of the provisions of this Agreement, the
nonbreaching party shall be entitled to equitable relief, including in the
form of injunctions and orders for specific performance, where the applicable
legal standards for such relief in such courts are met, in addition to all
other remedies available to the non-breaching party with respect thereto at
law or in equity.
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8.16 ATTORNEY'S FEE'S.
In the event of any Action for the breach of this Agreement or
misrepresentation by any party, the prevailing party shall be entitled to
reasonable attorney's fees, costs and expenses incurred in such Action.
8.17 REPRESENTATION BY COUNSEL.
Seller and Buyer each acknowledge that each party to this Agreement
has been represented by counsel in connection with this Agreement and the
transactions contemplated by this Agreement. Accordingly, any rule of Law or
any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived.
8.18 INTERPRETATION.
The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intent of Buyer and Seller. Further,
"hereof," "herein," "hereunder," "hereto," "this Agreement" and comparable
terms refer to the entire instrument, including any exhibits or schedules to
the instrument, and not to any particular article, section or other
subdivision of the instrument.
8.19 SEVERABILITY.
If any provision of this Agreement is determined to be invalid,
illegal or unenforceable by any Governmental Entity, the remaining provisions
of this Agreement to the extent permitted by Law shall remain in full force
and effect provided that the essential terms and conditions of this Agreement
for all parties remain valid, binding and enforceable; provided that the
economic and legal substance of the transactions contemplated is not affected
in any manner materially adverse to any party. In event of any such
determination, the parties agree to negotiate in good faith to modify this
Agreement to fulfill as closely as possible the original intents and purposes
hereof. To the extent permitted by Law, the parties hereby to the same extent
waive any provision of Law that renders any provision hereof prohibited or
unenforceable in any respect.
8.20 KNOWLEDGE CONVENTION.
Whenever any statement herein or in any schedule, exhibit, certificate or
other documents delivered to any party pursuant to this Agreement is made "to
[its] knowledge" or "to [its] best knowledge" or words of similar intent or
effect of any party or its representative, each statement shall be deemed to
include a representation that a reasonable investigation has been conducted.
A reasonable investigation shall mean that the senior representatives of the
party have reviewed the relevant statement and have consulted with the
appropriate management individuals as to whether they have
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knowledge of any fact or circumstance that would make any such statement
untrue and have reviewed documents in the possession of such representatives.
Knowledge of an individual shall be limited to the actual knowledge of such
individual after giving effect to the investigation described above and shall
not include any matter, fact or circumstance which such individual otherwise
should have known.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers as of the day and
year first above written.
SELLER FLORIDA LOGOS, INC.
By:
-----------------------------------------
Keith A. Istre
Vice President & Chief Financial Officer
LAMAR THE LAMAR CORPORATION
By:
-----------------------------------------
Keith A. Istre
Vice President & Chief Financial Officer
GUARANTOR LAMAR ADVERTISING COMPANY
By:
-----------------------------------------
Keith A. Istre,
Vice President & Chief Financial Officer
BUYER UNIVERSAL OUTDOOR, INC.
By:
-----------------------------------------
Brian T. Clingen
Vice President & Chief Financial Officer
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EXECUTION COPY
AGREEMENT
THIS AGREEMENT is made on June ___, 1997, by and among AMELIA NEWMAN and
MARILYN COLE, the sole members of an unincorporated joint venture whose F.E.I.N.
is 11-6137748 (collectively, the "SELLER"), UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, a Delaware corporation whose F.E.I.N is _______________
("BUYER"), UNIVERSAL OUTDOOR, INC., an Illinois corporation whose F.E.I.N. is
36-3951893 ("PARENT"), and ALLIED OUTDOOR ADVERTISING, INC., a New York
corporation ("GUARANTOR"). In consideration of the mutual promises and
undertakings contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
SELLER agrees to sell and BUYER agrees to buy certain specified assets of
SELLER, upon the following terms and conditions:
1.0 EFFECTIVE DATE. The effective date of the transfer of the assets to
be conveyed shall be the date of Closing.
2.0 ASSETS TO BE SOLD. At Closing, SELLER agrees to convey to BUYER all
of SELLER'S rights, title and interests in and to the following property
("Assets") at the locations listed on Exhibit 2.0 free and clear of all liens
and encumbrances that are caused by any action, inaction or omission by Seller,
by a Bill of Sale and Assignment and Assumption Agreements:
2.1 OUTDOOR ADVERTISING DISPLAYS. All personal property owned by
Seller and used in the operation of the existing bulletin, painted walls or any
other outdoor advertising displays ("Displays") as are more fully described by
location in Exhibit 2.0, which property shall be conveyed pursuant to the
original Bill of Sale, which is attached as Exhibit 2.1;
2.2 GROUND LEASES. The title, leases, licenses or agreements for the
rights of use ("Leases"), for the locations listed on Exhibit 2.0, which Leases
shall be conveyed pursuant to the original Assignment and Assumption of Leases,
which is attached as Exhibit 2.2;
2.3 ADVERTISING CONTRACTS. The advertising contracts ("Contracts")
for the locations listed on Exhibit 2.0, which
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Contracts shall be conveyed pursuant to the original Assignment and Assumption
of Advertising Contracts, which is attached as Exhibit 2.3;
2.4 PERMITS. All permits and governmental approvals ("Permits") for
the purposes of erecting, operating, illuminating and maintaining the Displays
at the locations listed on Exhibit 2.0, which Permits shall be conveyed pursuant
to the original Assignment and Assumption of Permits, which is attached as
Exhibit 2.4; and
2.5 [Intentionally Omitted]
3.0 PURCHASE PRICE. BUYER agrees to purchase the Assets for the sum of
$2,303,040 (plus or minus prorations as specified below)("Purchase Price")
payable to SELLER and PARENT agrees to assume the Assumed Liabilities (as
defined below) pursuant to an original undertaking in the form attached as
Exhibit 3.0(b)("Undertaking"). The Purchase Price shall be paid by wire
transfer to an account designated by Seller on Exhibit 3.0(a).
3.1 ASSUMED LIABILITIES. Assumed Liabilities means all obligations
of the Seller pursuant to the Leases, Permits and Contracts.
3.2 ALLOCATION OF PURCHASE PRICE. Prior to the Closing Date, the
BUYER and the SELLER shall mutually agree to (and shall each deliver at Closing)
the allocation of the Purchase Price as provided below (the "Allocation
Schedule"). Prior to Closing, the SELLER shall make available to the BUYER, or
provide the BUYER with access to, all information necessary for the preparation
of the Allocation Schedule. The BUYER and the SELLER shall cooperate and use
their best efforts to prepare and to agree to the Allocation Schedule prior to
Closing. The Allocation Schedule shall allocate the Purchase Price (which in
the parties joint discretion constitutes the amount paid to acquire the separate
Assets for federal, state or local income tax purposes) among the Assets
provided for in Section 2.0 hereof in accordance with the fair market value of
such Assets. The BUYER and SELLER shall each report the transactions
contemplated under this Agreement for all federal, state and local income tax
and other purposes (including, without limitation, for purposes of Section 1060
of the Code) as set forth on the Allocation Schedule.
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4.0 CLOSING. This transaction shall be closed ("Closing") simultaneously
with the Closing under that certain Asset Purchase Agreement, by and between
BUYER, PARENT and Allied Outdoor Advertising, Inc., a New York corporation,
dated June , 1997 ("Closing Date").
5.0 TRANSFER OF ASSETS.
5.1 SELLER shall convey the Assets referred to in Paragraphs 2.0 -
2.4 to BUYER by delivering to BUYER a Bill of Sale and Assignment and Assumption
Agreements in the form set forth on Exhibits 2.1, 2.2, 2.3 and 2.4. PARENT
shall assume the Assumed Liabilities referred to in paragraph 3.1 by delivering
to SELLER the Undertaking in the form set forth in Exhibit 3.0(b).
5.2 BUYER shall be entitled to all payments due under the Contracts
beginning on the Closing Date and thereafter. In the event the SELLER receives
any such payments after Closing, the same shall be immediately transferred to
the BUYER. In the event the SELLER receives, after Closing, any checks for any
such payments payable to the SELLER, the SELLER shall endorse the same, payable
to the order of the BUYER, and shall immediately deliver the said checks to the
BUYER. It is understood, however, that any sums due under the Contracts for any
time period before the Closing shall remain the property of the SELLER and shall
continue to be a receivable of the SELLER, even after Closing. If there shall
be any check received pertaining to both time periods (before and after the
Closing) BUYER and SELLER agree to distribute the proceeds in a manner
consistent with this paragraph. At Closing, SELLER shall deliver executed
Notices from SELLER to advertisers directing payment to BUYER after the Closing
of payments for advertising services dated on and after the Closing on Contracts
conveyed. At Closing BUYER shall deliver executed notices from BUYER to lessors
of the Leases advising the lessors that the SELLER's obligations under the
Leases have been assigned to and assumed by the PARENT effective the Closing.
5.3 SELLER will, on or after Closing, execute and deliver any other
documents as may be reasonably necessary to transfer or further perfect title to
the Assets transferred to BUYER including, without limitation, bills of sale,
assignments, permits and any other documents and send letters and notices to
advertisers, lessors and appropriate government officials
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notifying them of the date of transfer and that future payments, notices, etc.,
are to be directed to BUYER or its nominee.
6.0 CLOSING STATEMENT. At the time of Closing, the parties shall prepare
a Closing Statement which shall be signed by each of the parties and shall
indicate appropriate debits and credits on account of the Purchase Price,
prorations, security deposits and other adjustments as more fully described in
this Agreement.
7.0 BOOKS AND RECORDS. At the time of Closing, SELLER shall deliver to
BUYER all books, records, and other documents in SELLER's possession or control,
relating to the Assets, including but not limited to the following: (1) all
Leases, Contracts and Permits (2) all communications from lessors, advertisers,
government authorities or third-parties relating to the Assets or the operation
of Assets, and (3) all documents and computer-generated reports of the last
twelve (12) months relating to the Assets to the extent they exist and are
conveniently available, including a complete list of all ground lease lessors,
advertising customers and their respective mailing addresses and phone numbers,
all photographs of Displays under contract and all art work, sketches, pounce
patterns, diagrams, schematics and related materials.
7.1 SELLER may retain copies of and shall continue after the Closing
Date to have access to any books, records or other documents transferred:
7.1.1 which are or may be relevant to any claim or defense
SELLER may have against third persons, including any governmental body, in any
action or proceeding concerning the Assets, or
7.1.2 which are or may be relevant to any liability of Seller
in connection with or arising out of the conduct or ownership of the Assets.
7.2 This provision shall not constitute a covenant by or requirement
that the BUYER preserve or retain for more than one year from the Closing Date
any books, records, or other documents delivered under this provision.
8.0 NO LIENS AT CLOSING. SELLER will, prior to or at the time of Closing,
take such steps necessary to deliver title to the
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Assets free of any liens or encumbrances that are caused by any action, inaction
or omission by SELLER and as otherwise warranted.
9.0 PRORATIONS. The Purchase Price set forth in Paragraph 3.0 is subject
to the following adjustments and prorations:
9.1 Plus an amount which will credit SELLER for lease payments which
have been paid in advance for time periods on and after Closing ("Prepaid
Leases"). Attached as Exhibit 9.1 is a list of Prepaid Leases which Buyer and
Seller agree shall be added to the Purchase Price.
9.2 Minus the amounts which will credit Buyer for the following:
9.2.1 Any lease payments for which Buyer becomes obligated
relating to any period of time prior to Closing.
9.2.2 Any advertising services delivered by Parent or Buyer
on and after Closing for which Seller has already billed or otherwise receives
payment.
9.2.3 All items of income and expense listed below relating
to the Assets will be prorated as of the Closing Date, with Seller liable to the
extent such items relate to any time period up to and including the Closing
Date, and Buyer liable to the extent such items relate to periods on or
subsequent to the Closing Date; including without limitation (a) personal
property, real estate, occupancy and water taxes, if any, on or with respect to
the Assets; (b) rents, taxes and other items payable by Seller under any
contract to be assigned to or assumed by Buyer; (c) the amount of sewer rents
and charges for water, telephone, electricity and other utilities and fuel; (d)
all rentals that are or would be payable or have accrued pursuant to "percentage
rental" lease provisions with respect to periods after the Closing Date; and (e)
all items paid or payable on or after the Closing Date under any obligation
specifically assumed to the extent not specifically referenced in clauses (a) -
(d) above which are normally prorated in connection with similar transactions.
A list of percentage leases with the date of expiration is attached hereto as
Exhibit 9.2.3;
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9.2.4 If current payments with respect to items to be
prorated pursuant to this Section 9.2 are not ascertainable on or before the
Closing Date, such payments shall be prorated on the basis of the most recently
ascertainable bill therefor and shall be reprobated between Seller and Buyer
when the current bills with respect to such items have been issued and a cash
settlement shall be made within thirty (30) days thereafter.
10.0 SELLER'S AND GUARANTOR'S WARRANTIES. SELLER represents, warrants and
agrees that the following are true and correct on the date of this Agreement and
will continue to be true and correct on each day until and including the Closing
as though made on and as of each day:
10.1 CAPACITY. Amelia Newman and Marilyn Cole have the legal
capacity to execute this Agreement and to consummate the transactions
contemplated hereby. Seller is an unincorporated joint venture whose sole
members are Amelia Newman and Marilyn Cole.
10.2 AUTHORIZATION. SELLER is duly authorized to execute, deliver and
complete this Agreement.
10.3 [Intentionally Omitted]
10.4 LIABILITIES. Except as set forth in Exhibit 10.5, SELLER has
not received written notice nor has any knowledge of any liability, absolute or
contingent, arising from or in any way connected with the Assets.
10.5 LITIGATION. Except as set forth in Exhibit 10.5, Seller has not
received written notice nor has any knowledge of any action, proceeding, or
investigation pending or threatened against SELLER or involving any of the
Assets before any court or before any governmental department, commission,
board, agency, or instrumentality, nor does SELLER know of any basis for any
such action, proceeding or investigation which could result in any order,
injunction or decree against SELLER or involve any of the Assets.
10.6 AGREEMENTS. This Agreement will not conflict with, result in a
breach of the terms and conditions of, accelerate any provision of, or
constitute any default under any
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contract or agreement to which SELLER is now, or may become a party.
10.7 TITLE OF ASSETS. As of the Closing, in the case of the Leases,
Seller has, and will deliver to Buyer a leasehold interest in each of the real
properties described on Exhibit 2.0, free and clear of all liens and
encumbrances that are caused by any action, inaction or omission by Seller. As
of Closing, the Seller will have, and will deliver to the Buyer, good and
marketable title to all of the other Assets.
10.8 CONDITION OF DISPLAYS. The Displays and all related equipment
to be sold to BUYER are in good working order and repair and are fit for their
intended purpose in accordance with industry standards. SELLER has not received
any written notice nor has any knowledge that any Display fails to comply with
all applicable building codes, zoning or other promulgations of entities having
jurisdiction over the construction and maintenance of the Displays, except as
set forth on Exhibit 10.8.
10.9 COMPLIANCE WITH APPLICABLE LAWS. The SELLER has not been
threatened to be charged with, nor has been given written notice of, any
violation of, or to the best of SELLER's knowledge, is under investigation
with respect to, any applicable laws, ordinances, rules and regulations of
any federal, state, local or foreign governmental authority, except as set
forth on Exhibit 10.9(a). The SELLER (i) has timely filed or will timely
file all tax returns required to be filed by the SELLER on or prior to the
Closing Date, (ii) has timely paid in full all taxes that are due or claimed
to be due with respect to any periods ending on or before the Closing Date,
(iii) is not required to file any state tax returns other than as set forth
on Exhibit 10.9(b), (iv) has not received any written notice nor has any
knowledge that any deficiency for any taxes has been proposed, asserted or
assessed against the SELLER which has not been resolved and paid in full and
(v) has not received any notice of deficiency or assessment from any tax
authority with respect to liabilities for taxes which has not been resolved
and paid in full. In addition, there are no liens, security interests or
other encumbrances for taxes upon any of the Assets other than liens,
security interests or other encumbrances for taxes not yet due or payable.
The GUARANTOR shall also deliver to BUYER proper certified copies of
resolutions authorizing the GUARANTOR's guarantee of the SELLER's obligations
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under this Agreement and the grant of a non-exclusive royalty-free license to
BUYER and PARENT to use the GUARANTOR's name and marks.
10.10 LEASES. The Leases are in full force and effect and permit the
continued presence of the Displays as stated in the Leases. SELLER has not
received written notice nor has any knowledge that either SELLER or any lessor
is in default of any Lease. The Leases are freely assignable to BUYER without
consent of the lessors or any other party. Contractual lease payments will be
made by SELLER for all periods up to the Closing.
10.11 CONTRACTS. The Contracts are in full force and effect and
enforceable in accordance with their terms. Neither SELLER nor to SELLER's
knowledge is any advertiser in default of any Contract.
10.12 PERMITS. Including as set forth in Exhibit 10.5, SELLER has
disclosed to BUYER and PARENT all information it possesses with respect to all
permits and other federal, state and local authorizations which permit the
continued presence of the Displays (where located); all applicable fees for such
Permits have been paid; to SELLER's knowledge, all such Permits are fully
transferable to BUYER; and neither the execution nor the consummation of this
Agreement will terminate any Permit. SELLER agrees to cooperate fully with
BUYER in renewing any Permit after Closing, PROVIDED, THAT, any such renewal
shall be at the sole expense of BUYER.
10.13 BROKERS. SELLER is not a party to or in any way obligated
under any contract for payment of fees and expenses to any broker or finder in
connection with the origin, negotiation, execution or consummation of this
Agreement, and notwithstanding Paragraph 15, SELLER agrees to indemnify and hold
BUYER harmless from any liability arising from this transaction from any loss,
liability or obligation incurred by BUYER by reason of a breach of this
representation.
10.14 DISCLOSURE. No representation or warranty made by SELLER in
this Agreement nor any statement or certificate already furnished or to be
furnished by SELLER in connection with the transactions contemplated herein,
contain any known untrue statement of or fails to state a known material fact.
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10.15 NO CONTINUING INTEREST. Following Closing, neither SELLER nor
any officer, director or shareholder of SELLER will have any direct, indirect or
beneficial ownership or other financial interest in any real or personal
property which is in any way involved with or related to the operation of the
Assets being purchased by BUYER.
11.0 PARENT'S AND BUYER'S WARRANTIES. PARENT and BUYER represent, warrant
and agree that the following are true and correct on the date of this Agreement
and will continue to be true and correct on each day until and including the
Closing as though remade each day.
11.1 ORGANIZATION. Each of PARENT and BUYER is a corporation formed
under the laws of its state of incorporation, it has complied with all laws
concerning the right of the corporation to conduct its business and is legally
qualified to transact such business. Each of PARENT and BUYER has the full
power and authority to own, lease and operate its properties and conduct its
business as conducted in the places where the properties are now owned, leased
or operated, by SELLER.
11.2 AUTHORIZATION. Each of PARENT and BUYER is duly authorized to
execute, deliver and complete this Agreement.
11.3 COMPLIANCE WITH STATES' CORPORATE LAWS. Each of PARENT and
BUYER will comply with all the requirements and conditions of the applicable
corporation law of its state of incorporation relative to the sale of the assets
by the date of Closing and will deliver to SELLER an Officer's Certificate
attesting to its authority to negotiate and consummate this transaction whether
or not required by the applicable state corporate law.
11.4 BROKERS. Neither PARENT nor BUYER is a party to or in any way
obligated under any contract for payment of fees and expenses to any broker or
finder in connection with the origin, negotiation, execution or consummation of
this Agreement, and notwithstanding Paragraph 15, each of PARENT and BUYER
agrees to indemnify and hold SELLER harmless from any liability arising from
this transaction from any loss, liability or obligation incurred by SELLER by
reason of a breach of this representation.
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12.0 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of BUYER to
close or perform is subject to the satisfaction of the following conditions, any
of which the BUYER may at its election enforce or waive:
12.1 [Intentionally Omitted]
12.2 All representations and warranties of SELLER hereunder shall be
true and correct as of the date of this Agreement and shall be true and correct
in all respects on the Closing Date with the same force as if such
representations and warranties had been made on the Closing Date, all agreements
to be performed by SELLER on or prior to the Closing Date shall have been fully
performed, and BUYER shall have received a certificate dated the Closing Date
signed by Amelia Newman and Marilyn Cole to that effect.
12.3 There shall not have been any material adverse change in the
Assets or SELLER's condition, financial or otherwise, including without
limitation its relationships with customers, landlords or others, between the
date of this Agreement and the date of Closing. SELLER agrees to operate and
maintain its business in its regular course from the date of this Agreement to
Closing.
12.4 SELLER shall have maintained the Assets to be conveyed,
including the Displays, in at least as good condition and repair as on the date
of this Agreement and will not voluntarily suffer anything to be done that will
decrease the value of the Assets, ordinary wear and tear excepted.
12.5 Counsel for BUYER shall have approved the form, substance and
sufficiency of all instruments to be delivered by SELLER at or before Closing.
Approval will not be unreasonably withheld.
12.6 If SELLER cannot timely cure any defect which prevents Closing
after its best efforts, then either party may rescind this Agreement.
13.0 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of SELLER to
close or perform is subject to the satisfaction of the following conditions, any
of which the SELLER may at its election enforce or waive:
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13.1 All representations and warranties of BUYER and PARENT hereunder
shall be true and correct as of the date of this Agreement and shall be true and
correct in all respects on the Closing Date with the same force as if such
representations and warranties had been made on the Closing Date, all agreements
to be performed by BUYER and PARENT on or prior to the Closing Date shall have
been fully performed, and SELLER shall have received a certificate dated the
Closing Date signed by the duly authorized President or Vice President of BUYER
and PARENT to that effect.
13.2 Counsel for SELLER shall have approved the form, substance and
sufficiency of all instruments to be delivered by BUYER and PARENT at or before
Closing. Approval will not be unreasonably withheld.
13.3 If BUYER cannot timely cure any defect which prevents Closing
after its best efforts, then either party may rescind this Agreement.
14.0 GENERAL CONDITIONS.
14.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties made by the Parties to this Agreement shall
survive until fourteen (14) months following the Closing of this Agreement. The
covenants and agreements contained herein shall survive without limitation.
14.2 SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of SELLER PARENT and BUYER.
14.3 NOTICES. All notices shall be in writing and delivered in person
or sent by certified, registered or express mail or by facsimile:
IF FOR PARENT OR BUYER, Universal Outdoor, Inc.
ADDRESSED TO: 321 North Clark Street
Suite 1010
Chicago, Illinois 60601
Attn: Paul G. Simon
Telecopy: (312) 664-8071
Kelso & Company
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320 Park Avenue
24th Floor
New York, New York 10022
Attn: James J. Connors III
Telecopy: (212) 223-2379
WITH A COPY TO: Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Lou R. Kling, Esq.
Howard L. Ellin, Esq.
Telecopy: (212) 735-2000
IF FOR SELLER, ADDRESSED TO: Amelia Newman and Marilyn Cole c/o
Allied Outdoor Advertising Inc.
34 Florence Street
South Hackensack, New Jersey 07606
Attn: Marc Joseph
Senior Vice President for
Legal Affairs, General Counsel
Telecopy: (201) 646-1956
WITH A COPY TO: Allied Outdoor Advertising Inc.
34 Florence Street
South Hackensack, New Jersey 07606
Attn: George W. Newman
Telecopy: (201) 646-1956
Joseph & Feldman
One Parker Plaza
Fort Lee, New Jersey 07024
Attn: Fred Feldman, Esq.
Telecopy: (201) 592-1906
or such other address for either or both as is stated in a written notice given
in compliance under this clause.
14.4 HEADINGS. The various headings used in this Agreement as
headings for sections or otherwise are for convenience only and shall not be
used in interpreting the text of the section in which they appear.
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14.5 PRESS RELEASES. Prior to the Closing, any press releases or
other public announcement of this transaction, other than any filing that may be
required by law, shall be first approved by the BUYER and the SELLER.
14.6 GOVERNING LAW. This Agreement shall be construed and interpreted
in accordance with the law of the State of New York, without regard to the
conflict of laws principles thereof.
14.7 SEVERABILITY. The invalidity of any provision of this Agreement
shall not impair the validity of any other provision. If any provision of this
Agreement is determined by a court of competent jurisdiction to be
unenforceable, that provision will be deemed severable and the Agreement shall
be enforced with that provision severed or as modified by the court to the
extent necessary to carry out the present manifest intentions of the parties.
14.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement sets forth the
entire understanding of the parties. It may be amended, modified or terminated
only by instruments signed by the parties.
14.9 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be and shall constitute one and the same
instrument.
14.10 FEES AND COSTS. PARENT, BUYER and SELLER agree that each party
shall bear its own costs and expenses, including attorneys fees, in connection
with this transaction.
15.0 INDEMNIFICATION.
15.1 SELLER shall defend, indemnify and hold PARENT and BUYER
harmless against and in respect of:
15.1.1 Any and all loss, damage, deficiency, or liability from
(i) any misrepresentation, breach of representation, warranty or covenant, or
nonfulfillment of any agreement on the part of SELLER under this Agreement and
(ii) any liability or obligation incurred by SELLER or arising out of any event
or circumstances occurring prior to the Closing Date which is not an Assumed
Liability by BUYER (including, without limitation, the Excluded Liabilities (as
defined in the Undertaking)); and
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15.1.2 Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys'
fees, incident to Sub-Paragraph 15.1.1.
15.1.3 The SELLER's obligation to indemnify the PARENT and
BUYER for damages pursuant to this Section 15.1 is subject to the following
limitations: (i) no indemnification shall be made by the SELLER for damages
arising solely from clause (i) of Sub-Paragraph 15.1.1 unless the aggregate
amount of such damages exceeds $47,000 and then to the full extent of all such
damages; and (ii) in no event shall the Seller's aggregate obligation to
indemnify the PARENT and BUYER hereunder exceed the Purchase Price.
15.2 PARENT or BUYER shall within reasonable time of its receiving
notice of a claim give written notice to the other party of any claim for which
that party seeks indemnification under Paragraphs 15.1, and the indemnitor shall
have the right to contest, defend, or litigate any matter in respect of which
indemnification is claimed. Any delay in or failure to give notice of a claim
for indemnification shall not relieve the indemnitor's obligation except to the
extent that indemnitor can demonstrate prejudice by such delay or failure. The
indemnitor shall have the exclusive right to settle, either before or after the
initiation of litigation, any matter in respect of which indemnification is
claimed, but, prior to any such settlement, written notice of its intention to
do so shall be given to the other party. In the event the indemnitor fails
promptly to defend any such claim as provided in Paragraphs 15.1, the other
party may do so and shall then have the right, in its sole discretion, exercised
in good faith and upon the advice of counsel, to settle, either before or after
the initiation of litigation, any matter in respect of which indemnification is
claimed.
16.0 CONTINUING COVENANTS. [Intentionally Omitted]
17.0 CORPORATE NAME. GUARANTOR hereby grants to BUYER and PARENT a
non-exclusive royalty-free license to use the names and marks set forth on
Exhibit 17.0 in connection with the operation of the Assets following the
Closing Date for a term of six months following the Closing Date in a manner
consistent with the use of such licensed marks by the SELLER in connection with
the SELLER's business prior to the Closing Date, such grant of rights to BUYER
and PARENT being subject to BUYER's and PARENT's obligation not to use the
licensed marks in any manner which would materially degrade the
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quality or value of such licensed marks. Following such period, such license
shall continue thereafter, on the same terms and conditions as provided above,
until such time as GUARANTOR shall have notified BUYER and PARENT of its intent
to terminate the license; PROVIDED, HOWEVER, that such notification shall be in
writing and shall be given at least sixty (60) days prior to the intended date
of termination.
18.0 GUARANTEE. In consideration of the benefits to SELLER under this
Agreement, GUARANTOR does hereby guarantee, jointly and severally, with SELLER,
all of the agreements (including but not limited to agreements to indemnify),
representations, warranties and covenants of SELLER under this Agreement and
under all documents to be executed pursuant to this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
AMELIA NEWMAN
MARILYN COLE
UNIVERSAL OUTDOOR (N.Y) ADVERTISING
ACQUISITION CORPORATION
By:__________________________
Name:
Title:
UNIVERSAL OUTDOOR, INC.
By:__________________________
Name:
Title:
As to Sections 10.9, 17.0 and 18.0,
ALLIED OUTDOOR ADVERTISING, INC.
By:
Name:
Title:
<PAGE>
INDEX TO EXHIBITS
Exhibit
2.0 - List of Displays
2.1 - Bill of Sale
2.2 - Assignment and Assumption of Leases
2.3 - Assignment and Assumption of Contracts
2.4 - Assignment and Assumption of Permits
3.0(a) - Seller's Account Information
3.0(b) - Form of Undertaking
9.1 - Prepaid Leases
9.2.3 - Percentage Leases
10.5 - Litigation
10.8 - Condition of Displays
10.9(a) - Compliance With Applicable Laws
10.9(b) - Taxes
17.0 - Use of Name
<PAGE>
EXHIBIT 2.0
DISPLAYS
<PAGE>
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Seller") pursuant to that certain Agreement, dated June 30, 1997
(the "Agreement") for and in consideration of the sum of $ and other
valuable consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y)
ADVERTISING ACQUISITION CORPORATION ("Buyer"), the receipt of which is hereby
acknowledged, do hereby grant, bargain, sell and convey to Buyer, its successors
and assigns, forever, the structures, light and electrical fixtures, aprons,
catwalks, panels and such other fixtures and appurtenances as now exist on the
outdoor advertising displays at the locations more fully described on Exhibit
2.0 to the Agreement attached hereto, subject to the terms and conditions of the
Agreement.
TO HAVE AND TO HOLD THE SAME, unto the Buyer, its successors and assigns
forever. The Seller for itself and its successors and assigns, does hereby
covenant and agree to and with said Buyer, its successors and assigns that
Seller is the lawful owner of the Assets (as defined in the Agreement), and has
good right to sell the same as aforesaid; that the same are free from all
encumbrances that are caused by any action, inaction or omission by Seller, and
the Seller will warrant and defend the sale of the Assets hereby made unto the
Buyer, its successors and assigns, against all and every person and persons
whomever, lawfully claiming or to claim the same, subject to encumbrances, if
any, hereinbefore mentioned.
IT WITNESS WHEREOF, the Seller executed this Bill of Sale this day of
July, 1997.
AMELIA NEWMAN
MARILYN COLE
______________________________
<PAGE>
ASSIGNMENT AND ASSUMPTION OF LEASES
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Assignor") pursuant to the terms of that certain Agreement dated
June 30, 1997 (the "Agreement"), and on behalf of itself for and in
consideration of the sum of $ and other good and valuable
consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, the receipt of which is hereby acknowledged, hereby
assign, transfer, and convey to UNIVERSAL OUTDOOR, INC. ("Assignee"), all of
Assignor's right, title and interest in and to the Leases, for the locations
listed on Exhibit 2.0 to the Agreement, subject to the terms and conditions of
the Agreement.
ASSIGNOR REPRESENTS AND WARRANTS that it owns free and clear of all liens
and encumbrances that are caused by any action, inaction or omission by Assignor
the interest set forth in the attached Leases and that such Leases are freely
assignable without the consent of any other party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
with respect to each of the foregoing Leases for and during the remainder of the
respective terms thereof, subject to the performance and observance of all other
covenants, conditions and stipulations set forth respectively therein. By its
acceptance of this assignment, Assignee hereby assumes all of the obligations of
Assignor provided for under each Lease arising from and after the date hereof.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted, this
assignment this day of July, 1997.
AMELIA NEWMAN
MARILYN COLE
<PAGE>
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:________________________________
Name:
Title:
<PAGE>
ASSIGNMENT AND ASSUMPTION OF ADVERTISING CONTRACTS
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Assignor") pursuant to the terms of that certain Agreement dated
June 30, 1997 (the "Agreement"), and on behalf of itself for and in
consideration of the sum of $ and other good and valuable
consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, the receipt of which is hereby acknowledged, hereby
assign, transfer, and convey to UNIVERSAL OUTDOOR, INC. ("Assignee"), all of
Assignor's right, title and interest in and to the Advertising Contracts, for
the locations listed on Exhibit 2.0 to the Agreement, subject to the terms and
conditions of the Agreement.
ASSIGNOR REPRESENTS AND WARRANTS that it owns free and clear of all liens
and encumbrances that are caused by any action, inaction or omission of Assignor
the interest set forth in the attached Advertising Contracts and that such
Advertising Contracts are freely assignable without the consent of any other
party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
with respect to each of the foregoing agreements for and during the remainder of
the respective terms thereof, subject to the performance and observance of all
other covenants, conditions and stipulations set forth respectively therein. By
its acceptance of this assignment, Assignee hereby assumes all of the
obligations of Assignor provided for under each Advertising Contract arising
from and after the date hereof.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted, this
assignment this day of July, 1997.
AMELIA NEWMAN
MARILYN COLE
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:________________________________
Name:
Title:
<PAGE>
ASSIGNMENT AND ASSUMPTION OF PERMITS
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Assignor") pursuant to the terms of that certain Agreement dated
June 30, 1997 (the "Agreement"), and on behalf of itself for and in
consideration of the sum of $ and other good and valuable
consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, the receipt of which is hereby acknowledged, hereby
assign, transfer, and convey to UNIVERSAL OUTDOOR, INC. ("Assignee"), all of
Assignor's right, title and interest in and to the Permits, for the locations
listed on Exhibit 2.0 of the Agreement, subject to the terms and conditions of
the Agreement.
ASSIGNOR REPRESENTS AND WARRANTS that it owns free and clear of all liens
and encumbrances that are caused by any action, inaction or omission of Assignor
the interest set forth in the attached Permits and that such Permits are freely
assignable without the consent of any other party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
with respect to each of the foregoing Permits for and during the remainder of
the respective terms thereof, subject to the performance and observance of all
other covenants, conditions and stipulations set forth respectively therein. By
its acceptance of this assignment, Assignee hereby assumes all of the
obligations of Assignor provided for under each Permit arising from and after
the date hereof.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted, this
assignment this day of July, 1997.
AMELIA NEWMAN
MARILYN COLE
<PAGE>
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:________________________________
Name:
Title:
EXHIBIT 3.0 (A)
SELLER'S ACCOUNT INFORMATION
FOR WIRE TRANSFER
<PAGE>
UNDERTAKING
UNDERTAKING executed and delivered on July , 1997 (the "Undertaking"), by
Universal Outdoor, Inc., an Illinois corporation (the "Parent"), in favor of
Amelia Newman and Marilyn Cole (together, the "Seller").
W I T N E S S E T H:
WHEREAS, pursuant to that certain agreement, dated as of
June 30, 1997 (the "Agreement"), between the Seller, Parent and Universal
Outdoor (N.Y.) Advertising Acquisition Corporation, a Delaware corporation (the
"Buyer"), the Seller has agreed to sell, convey, assign, transfer and deliver
all of its right, title and interest in and to the Assets to the Buyer and the
Parent, and the Buyer and the Parent have agreed to purchase, acquire and accept
such Assets from the Seller, all as more fully described in the Agreement; and
WHEREAS, pursuant to the Agreement, the Parent has agreed to enter into
this Undertaking, pursuant to which the Parent shall assume and agree to pay,
perform, and discharge or cause to be performed and discharged the liabilities
and obligations expressly set forth in Section 2, as more fully provided herein.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined herein
shall have the meaning ascribed to such terms in the Agreement.
2. UNDERTAKING. Except as provided in Section 3 below and subject to the
terms and conditions of the Agreement, the Parent hereby undertakes, assumes and
agrees to pay, perform or discharge, the obligations and liabilities of the
Seller pursuant to the Leases, Permits and Advertising Contracts (collectively,
the "Assumed Liabilities").
<PAGE>
3. EXCLUDED LIABILITIES. Notwithstanding anything contained herein to
the contrary, it is expressly understood and agreed by the parties hereto that
(i) the Assumed Liabilities shall not include any other liabilities or
obligations of the Seller, whether known or unknown, disclosed or undisclosed,
matured or unmatured, accrued, absolute, contingent or otherwise, not
specifically identified in Section 2 hereof and (ii) the Parent shall not
assume, or agree to perform, pay or discharge, and the Parent has not assumed,
any liabilities, obligations or commitments not expressly assumed pursuant to
Section 2 hereof, including, without limitation, liabilities or obligations
relating to or arising out of the following:
(a) any obligation of the Seller to indemnify any person or entity by
reason of the fact that such person or entity was a director, officer, employee,
shareholder or agent of the Seller or was serving at the request of the Seller
as a partner, trustee, director, officer, employee, shareholder or agent of
another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise);
(b) any liability of the Seller for costs and expenses incurred in
connection with the Agreement; and
(c) any obligation of the Seller under the Agreement.
4. BINDING EFFECT. This Undertaking shall inure to the benefit of the
Seller and its successors and permitted assigns and be binding upon and
enforceable against the Parent and its respective successors and permitted
assigns. In the event of a conflict between the terms hereof and the Agreement,
the terms of the Agreement shall control.
5. COUNTERPARTS. This Undertaking may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6. Governing Law. This Undertaking shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of law principles thereof.
<PAGE>
7. INDEMNIFICATION. Seller, Parent and Buyer hereby agree that the
provisions of Section 15.0 of the Purchase Agreement with respect to
indemnification shall govern all obligations of the parties with respect to the
Assumed Liabilities and the Excluded Liabilities and such other matters
contemplated by this Undertaking as applicable.
<PAGE>
IN WITNESS WHEREOF, this undertaking has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first above
written
AMELIA NEWMAN
MARILYN COLE
UNIVERSAL OUTDOOR, INC.
By:
Name:
Title
<PAGE>
EXHIBIT 3.2
ALLOCATION OF PURCHASE PRICE
<PAGE>
EXHIBIT 9.1
PREPAID LEASES
<PAGE>
EXHIBIT 9.2.3
PERCENTAGE LEASES
<PAGE>
EXHIBIT 10.5
LITIGATION
1. City of New York v. Moen Electric, Thomas Magliaccio, Ace Sign & Rigging
(Allied Outdoor Advertising)()
- ---------------------
(1) Buyer acknowledges full responsibility for the indicated lawsuit including
liabilities growing out of the same and all costs and expenses related
thereto, but with respect to costs and expenses, only to the extent such
costs and expenses arise after the Closing. Supreme Court
Kings County, Docket # 8852/96 (Judge Goldberg); on appeal
<PAGE>
EXHIBIT 10.8
CONDITION OF DISPLAYS
<PAGE>
EXHIBIT 10.9(A)
COMPLIANCE WITH APPLICABLE LAWS
SEE EXHIBIT 10.5
<PAGE>
EXHIBIT 10.9(B)
TAXES
<PAGE>
EXHIBIT 17.0
USE OF NAME
With regard to the use of the name, Seller grants to the Buyer and
Parent a non-exclusive royalty-free license to use the following names and mark
and no other:
The word "Allied" contained on an elliptical shape as shown hereon.
Such use shall be solely and exclusively limited in connection with the
identification on existing displays.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND IN
THE COMPANY'S 10-Q FOR THE YEAR TO DATE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,168
<SECURITIES> 0
<RECEIVABLES> 33,509
<ALLOWANCES> (1,625)
<INVENTORY> 0
<CURRENT-ASSETS> 49,173
<PP&E> 603,918
<DEPRECIATION> (61,150)
<TOTAL-ASSETS> 853,689
<CURRENT-LIABILITIES> 32,553
<BONDS> 509,116
0
0
<COMMON> 0
<OTHER-SE> 231,972
<TOTAL-LIABILITY-AND-EQUITY> 853,689
<SALES> 97,113
<TOTAL-REVENUES> 106,177
<CGS> 0
<TOTAL-COSTS> 74,741
<OTHER-EXPENSES> (514)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,898
<INCOME-PRETAX> 988
<INCOME-TAX> 0
<INCOME-CONTINUING> 988
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 988
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
